The Central Bank of Kenya, under Dr. Patrick Njoroge, has increased the Central Bank Rate rate by 75 basis points to 8.25 percent, in an effort to tame the skyrocketing inflation.
“The Committee noted the sustained inflationary pressures, the elevated global risks, and their potential impact on the domestic economy and concluded that there was scope for a tightening of the monetary policy in order to further anchor inflation expectations,” said CBK while announcing the new rate.
The MPC last raised the rate by 50 basis points at its sitting in May to stem rising inflation and stabilize the shilling.
Here is the statement from CBK:
The inflation rate for the month of August hit 8.5 percent, from the 8.3 percent recorded in July 2022 mainly driven by the elevated food and fuel prices.
Food and non-alcoholic beverages had their year-to-year change to 15.3 percent while the month-to-month was at 0.5 percent. The m/m increase was mainly contributed by the increase in prices of maize flour-loose, sugar, and mangoes. The increase was however mitigated by a decline in the prices of carrots and onion leeks.
For the month of September, experts have already predicted another spike in the inflation rate. “We are projecting the y/y inflation rate for September 2022 to fall within the range of 8.7-9.1 percent,” said Cytonn Investments in their latest report.
Fuel prices for the period 15th September 2022 to 14th October 2022 increased by 12.7, 17.9, and 15.7 percent to 179.3 shillings per liter, 165.0 shillings per liter, and 147.9 shillings per liter from 159.1 shillings per liter Kshs 140.0 per liter and Kshs 127.9 per liter for Super Petrol, Diesel and Kerosene, respectively.
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