Kenya’s central bank maintains benchmark lending rate at 7%

Central Bank of Kenya.PHOTO/East African

The Central Bank of Kenya (CBK) on Wednesday maintained its benchmark lending rate at 7.0 percent amid an economic optimism.

Patrick Njoroge, CBK governor, who chaired the Monetary Policy Committee (MPC) meeting in Nairobi noted that inflation expectations remained well anchored within the target range while there is general optimism about economic growth prospects for 2021.

“The MPC will closely monitor the impact of the policy measures, as well as developments in the global and domestic economy and stands ready to take additional measures as necessary,” Njoroge said in a statement.

He said that the current accommodative monetary policy stance remains appropriate, and thus the retention of the Central Bank Rate (CBR) at 7.0 percent.

The CBK Governor noted that the leading indicators for the economy point to a relatively strong gross domestic product (GDP) recovery in the first half of 2021, mainly supported by strong performance of construction, information and communication, education, and real estate sectors.

According to the apex bank, the economy is expected to rebound this year, supported by the continued reopening of the services sectors including education, recovery in manufacturing, and stronger global demand.

Njoroge added that the CBK foreign exchange reserves, which currently stand at one trillion shillings (about 9.35 billion U.S. dollars) which is equivalent to 5.72 months of import cover and continue to provide adequate cover and a buffer against short-term shocks in the foreign exchange market.