Capital Markets

CBK faces a new test in March 19th policy meet

The Central Bank of Kenya (CBK) building in Nairobi. FILE PHOTO | NMG
The Central Bank of Kenya (CBK) building in Nairobi. FILE PHOTO | NMG 

The Central Bank of Kenya (CBK) has set its next monetary policy meeting for March 19, at a time its key rate-setting committee has signalled it has seen room for accommodative monetary policy.

At its last meeting on January 22 the MPC, which meets every two months, retained the benchmark lending rate at 10 per cent, maintaining a 17-month neutral policy stance.

This saw the maximum cost of loans remain unchanged.

“The committee noted that there was some room for accommodative monetary policy in the near term, as well as the risk of perverse outcomes. It concluded that there was need to further monitor and assess the impact of its policy actions,” said MPC chairman and CBK governor Patrick Njoroge in a statement after the January 22 meeting.

Experts though say rate caps have eroded MPC’s ability to set rates. Any response would upset current rate ceiling.