CBK shrugs off inflation jitters to maintain key lending rate

The Central Bank of Kenya (CBK) on Wednesday retained the base lending rate at 7.50 percent shrugging off mounting jitters over the economic fallout from the Russia-Ukraine war and the upcoming August 9 General Election.

This has spared consumers any increases in the cost of loans after the bank regulator sent its signal to banks to hold interest rates steady.

The Monetary Policy Committee (MPC) held the benchmark rate saying the current monetary policy stance had protected the shilling and reduced the threat of money-driven inflation. 

The MPC raised the rate by 50 basis points at its last sitting in May to stem rising inflation and stabilise the shilling.

“…the Committee noted that international commodity prices, particularly oil, wheat and edible oils had begun to moderate,” said the MPC.

“These developments are expected to ease domestic inflationary pressures in the near term. The MPC therefore decided to maintain the Central Bank Rate (CBR) at 7.50 percent.”

bnjoroge@ke.nationmedia.com