Central Bank Rate Retained At 7.00 Percent

The Monetary Policy Committee (MPC) has retained the Central Bank Rate (CBR) at 7.00 percent according to the announcement made by the Central Bank Kenya (CBK) on Wednesday. The announcement comes exactly as Cytonn had predicted.

“The MPC concluded that the current accommodative monetary policy stance remains appropriate, and therefore decided to retain the Central Bank Rate (CBR) at 7.00 percent,” said MPC in a statement.

According to the Committee, the package of policy measures implemented since March 2020 was having the intended effect on the economy, and are being augmented by the implementation of the announced fiscal measures in the FY2020/21 Budget.

“The MPC will continue to closely monitor the impact of the policy measures so far, as well as developments in the global and domestic economy, and stands ready to take additional measures as necessary,” said the Committee.

The Kenyan economy is still recovering from the heat of the ongoing Covid-19. In 2020, due to the pandemic, businesses shut down and people lost their jobs. Banks were forced to restructure their loans in order to cushion their customers.

As the year 2021 unfolds, analysts say they are hoping for a positive growth this year banked on tourism and other sectors that have now become fully operational. However, the punitive taxes in place might derail the expectations.

The global economy is now estimated to have contracted by 3.5 percent in 2020 but is expected to grow by 5.5 percent in 2021. This outlook is supported by the ongoing global rollout of COVID-19 vaccination programs and additional policy measures, particularly in the U.S.

“However, the outlook remains highly uncertain, partly due to the emergence of new variants of the virus and the reintroduction of containment measures in some economies,” said the Committee.

READ: Monetary Policy Committee Meeting This Wednesday