The Monetary Policy Committee has lowered the Central Bank Rate to 10.5 percent from the initial 11.5 percent.
This is the highest drop in the CBR by the Monetary Policy Committee in Kenya in a period of six months.
Monetary policy is the process by which the Central Bank influences the level of money supply credit in the economy in order to minimize excessive price fluctuations, and promote economic growth.
Monetary policy guards against inflation and ensures stability of prices, interest rates and exchange rates. This protects the purchasing power of the Kenya shilling and promotes savings, investment and economic growth. Through monetary policy, the Central Bank creates conditions that allow for increased output of goods and services in the economy, thereby improving the living standards of the people.
Article by Juma Fred.