The Central Bank of Kenya has left the benchmark lending rate unchanged at 9.50 percent on Monday as authorities have probably done enough to slow consumer price rises.
Kenya’s overall inflation declined to 7.9 percent in April 2023 from 9.2 percent in March, mainly driven by lower food prices. Food inflation declined to 10.1 percent in April from 13.4 percent in March, due to lower prices of vegetables attributed to the ongoing rains, and improved supply of select non-vegetable food items, the CBK said.
At the same time, fuel inflation remained elevated at 13.2 percent in April, largely reflecting increases in electricity prices due to higher tariffs, and the scaling down of the fuel subsidy. Food inflation is expected to moderate in the coming months following the long rains, and lower global food prices.
In the past one year, CBK has pushed up rates by 250 basis points, less than other economies in Africa such as debt-saddled Ghana, which held rates at 29.50 percent last week after increasing benchmark lending rate by 1,600 basis points.
CBK’s Monetary Policy Committee said that the impact of the further tightening of monetary policy in March 2023 to anchor inflationary expectations was still transmitting in the economy. Inflation in Kenya dropped to an annual 7.9 percent in April from 9.2 percent in March, owing to reduced food prices.