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CBK Retains Benchmark Rate at 7% backed by Recovering Economy.

The Central Bank of Kenya maintained the benchmark rate at 7% for the eighth consecutive time during Wednesday’s Monetary Policy Committee meeting. The committee said that leading economic indicators show a strong economic recovery in the first quarter of this year.

The inflation rate stood at 5.8% in April, within the bank’s target range of 2.5% to 7.5%. Private sector activity remained resilient with credit to the sector at 6.8% in the 12 months through April 2021.

According to the banks’ regulator, Kenyan banks have strong liquidity and capital adequacy ratios. CBK’s foreign currency reserves remain adequate to provide 4.55 months of import cover and cushion the economy against short-term shocks in the foreign exchange market.

A statement released by the Central Bank said, “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”.

The Monetary Policy Committee (MPC) led by Dr Patrick Njoroge, CBK Governor, vowed to closely monitor developments in the local and global economy and stands ready to take additional measures as necessary.

Also read: CBK to Retain Policy Rate at 7%