Kenya's inflation falls to 10 pc in June

Kenya's inflation for the month of June has dropped by more than two percentage points to 10.05 per cent from 12.22 per cent in May according to figures released by the Kenya National Bureau of Statistics (KNBS).

The Kenya National Bureau of Statistics on Friday said the food and non-alcoholic beverages index was down 1.91 per cent compared with a month before, while the month-on-month rate of inflation fell 0.77 per cent.

This was driven by a drop in the prices of milk, potatoes, tomatoes, onions, oranges, and sukuma wiki (kales) in the month of June compared to May. The cost of housing, water, electricity and cooking gas also reduced in the same period.

For instance, the cost of 50 units of electricity declined from Sh625 in May to Sh600 in June in 2012 due to a reduction in fuel adjustment charges.

Analysts indicate the fall in inflation could provide ground for the Central Bank of Kenya to cut interest rates. The bank has held the base rate at 18 per cent since December last year after the volatile Kenya shilling hit a historic low of 107 against the dollar.