Kenyans had a reprieve as the Central Bank of Kenya (CBK) declared that it would not raise the minimum lending rates.
The Monetary Policy Committee (MPC) said Monday, January 30, in a statement that it will keep the Central Bank Rate at 8.75 percent. CBK Governor Patrick Njoroge made the announcement.
Njoroge clarified that the committee had been pleased with how the November 2022 assessment had taken inflation into account.
He continued by saying that keeping the minimal lending rates was made possible in large part by recent government policies on tax collection.
The recently announced plans to permit restricted duty-free imports of a select number of food commodities will complement this action and are anticipated to moderate prices and reduce pressures on domestic inflation.
The committee, among other things, “stands ready to take additional measures when necessary” and “will closely monitor the impact of the policy measures, as well as developments on the global domestic economy.”
The CBK Governor stated that the MPC would have its next meeting in March 2023. In the meanwhile, interest on loans provided to Kenyans won’t be four percentage points more than the Central Bank Rate (CBR).
According to the MPC, private sector loans increased from 8.6% in 2021 to 12.5% in 2022. Additionally, the country’s economy was performing well, as shown by the rise in credit demand.
Njoroge, who also serves as the committee’s chair, said that there were 0.3% fewer non-performing loans. He continued by providing information on the foreign exchange reserves.
The statement stated, in part, that the CBK reserves, which are now valued at Ksh870 trillion (USD7,005 million), “continue to provide appropriate insurance and a buffer against any short-term shocks in foreign exchange.”
The MPC highlighted that the decline in food prices was a factor in the decline of the inflation rate, which as of December 2022 was 9.1%.
Manufacturing, tourism, and export were some of the other industries that have experienced recovery during the two months under evaluation.
