Interest Rate in Kenya
Kenya - Interest Rate
Central Bank leaves policy rate unchanged in November meeting
At its latest meeting held on 27 November, the Monetary Policy Committee (MPC) of Kenya’s Central Bank opted to keep the Central Bank Rate (CBR) on hold at 9.00%. The Bank’s decision was in line with market expectations.
Sustained optimism on Kenya’s growth prospects and well-anchored inflation expectations prompted the Bank to leave the rate on hold. Inflation edged down from 5.7% in September to 5.5% in October, remaining within the Bank’s 2.5%–7.5% target band. A decline in food prices, thanks to favorable weather conditions, offset higher energy and transport costs that arose from the implementation of VAT on petroleum products in September. Following last year’s protracted election cycle, economic activity has been supported by a more buoyant agricultural sector and an improvement in investor confidence.
Lower food prices, a decline in oil prices and reduced electricity tariffs should contain price pressures and keep inflation within target. Meanwhile, the government’s “Big Four” agenda that has prioritized investment in key sectors, along with healthy inflow of remittances and solid private sector credit growth, should help fuel a faster pace of expansion. While the introduction of the VAT should help to narrow the fiscal gap, the government will likely face challenges in meeting its fiscal targets.
Given that inflation expectations remain well-anchored and the growth outlook remains optimistic, the Bank’s accompanying statement indicated a neutral stance and noted that it would continue to closely monitor domestic and global developments to inform the course of monetary policy.
Kenya Interest Rate Forecast
FocusEconomics Consensus Forecast panelists expect the Bank Rate to end 2019 at 8.92%. For 2020, panelists project that the Bank Rate will be increased to 9.17% by the end of the year.
Kenya - Interest Rate Data
|Policy Interest Rate (%)||8.50||8.50||11.50||10.00||10.00|
5 years of economic forecasts for more than 30 economic indicators.
Kenya Interest Rate Chart
Source: Central Bank of Kenya
|Bond Yield||12.50||0.0 %||Jan 21|
|Exchange Rate||101.6||0.05 %||Jan 21|
|Stock Market||0.2||0.0 %||Jan 21|
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January 4, 2019
Private sector activity picked up in December, reflected by a rise in the Purchasing Managers’ Index (PMI), produced by IHS Markit and Stanbic Bank.
December 31, 2018
The latest national accounts data released by Kenya’s National Bureau of Statistics on 31 December showed that the economy grew at a strong pace again in the third quarter, despite losing some momentum from the previous quarter.
December 31, 2018
Consumer prices rose 0.65% over the previous month in December, contrasting a 0.18% month-on-month decline in November.
December 5, 2018
Private sector activity weakened slightly in November, reflected by a decline in the Purchasing Managers’ Index (PMI), produced by IHS Markit and Stanbic Bank.
November 27, 2018
At its latest meeting held on 27 November, the Monetary Policy Committee (MPC) of Kenya’s Central Bank opted to keep the Central Bank Rate (CBR) on hold at 9.00%.