Kenyan central bank retains benchmark rate at 9pc

Kenya's Central Bank governor Patrick Njoroge during a press conference

The Central Bank of Kenya on Wednesday retained its benchmark rate at nine percent, citing a stable macro-economic environment.

Governor of the Central Bank of Kenya, Patrick Njoroge, speaks September 26, 2018 during a press conference in Nairobi. (Photo by SIMON MAINA / AFP) (Photo credit should read SIMON MAINA/AFP/Getty Images)

Central Bank governor and chairman of the monetary policy committee (MPC) Patrick Njoroge said in a statement that there was sustained optimism on Kenya’s economic growth prospects despite the delayed onset of the long rains in parts of the country.

“Overall inflation is expected to remain within the target range in the near term, in part due to adequacy of food supplies and lower electricity prices,” Njoroge said.

Njoroge added that the foreign exchange market has remained stable, supported by the narrowing of the current account deficit to 4.7 percent of the gross domestic product in the 12 months to February from 5.5 percent in Feb. 2018.

“Private sector credit growth is expected to strengthen in 2019, with the anticipated higher economic activity and improved lending to the micro small and medium enterprises,” he noted.

According to the MPC, Kenya’s foreign exchange reserves, which currently stand at 825 billion shillings ($8.25 billion) or 5.3 months of import cover, continue to provide adequate cover and a buffer to the shilling against short-term shocks in the foreign exchange market.

“The committee therefore decided to retain the Central Bank rate at 9 percent. The MPC will continue to closely monitor developments in the global and domestic economy, and stands ready to take additional measures as necessary,” said the governor.

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