The Central Bank of Kenya (CBK) has retained the Central Bank Rate (CBR) at 7 percent on the account that the current accommodative monetary policy stance remains appropriate.
“The MPC will closely monitor the impact of the policy measures, as well as developments in the global and domestic economy, and stands ready to take additional measures as necessary,” said CBK in a statement.
CBK says the inflation rate across the country remains “well-anchored.” The month-to-month inflation stood at 5.8 percent in February compared to 5.7 percent in January. The inflation rate is expected to remain within the target range in the near term.
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The Central Bank stuck to the “strong growth” forecast on Monday, without commenting on new partial lockdown measures announced last Friday after a surge in infections and deaths from coronavirus. It did not say how the measures will impact the economy.
Private sector credit grew by 9.7 percent in the year to February, the bank said, reflecting the recovery in demand as the economy emerged from lockdown measures.
“The economy is expected to rebound strongly in 2021, supported by a recovery in the services sector particularly education and the wholesale and retail trade. This recovery will be anchored on the success of the containment measures and the vaccination program, including the measures announced on March 26,” the CBK added.
The reserve bank which held its bi-monthly Monetary Policy Committee (MPC) meeting on Monday has noted measures taken previously have had their intended effect in covering the economy amidst disruptions occasioned by the COVID-19 pandemic.