Kenya’s central bank has reduced its benchmark interest rate to 10.75% from 11.25% to ensure economic stability amid steady inflation. This decision aligns with the findings of economists and aims to maintain inflation below the 5% target range. The continued rate adjustments reflect a proactive monetary policy approach to support favorable economic conditions.
Kenya’s central bank has made a strategic decision to lower its benchmark interest rate from 11.25% to 10.75%, continuing a trend observed over the last four sessions. This adjustment aims to support economic stability and is aligned with stable inflation, which has remained within the target range for eight months. The decrease corresponds with findings from a Bloomberg survey of economists, signifying a proactive monetary policy approach.
The decision to lower the interest rate is primarily influenced by Kenya’s inflation figures, which have shown favorable trends. In January, inflation rose slightly to 3.3%, while core inflation—excluding volatility from food and energy—decreased to 2%. This stability is attributed to consistent core inflation levels, dropping energy prices, and a steady exchange rate, thereby facilitating a sound economic environment as commented on by the central bank’s governor.
Overall, the central bank’s cut of the interest rate to 10.75% reflects its commitment to maintaining economic stability amid favorable inflation conditions. By acting in coordination with economic forecasts and expert analyses, the central bank reinforces the intent to keep inflation below the 5% threshold, which is essential for economic growth.
Original Source: www.indexbox.io
