Kenya’s annual consumer inflation rose to 3.5% in February, continuing its four-month upward trend. Core inflation remained at 2.0%, while non-core inflation increased to 8.2%. The central bank cut its main interest rate to 10.75% to stimulate lending and support economic growth, expecting inflation to stay below target ranges in the near term.
Kenya’s annual consumer inflation rate increased for the fourth consecutive month, rising from 3.3% in January to 3.5% in February, as reported by the Kenya National Bureau of Statistics. Core inflation remained stable at 2.0% in February, showing no change from the previous month. However, non-core inflation saw a significant rise, moving from 7.1% in January to 8.2% in February.
To support economic growth and enhance lending, Kenya’s central bank has lowered its main interest rate to 10.75% for the fourth successive meeting. This decision, effective from February 5, reflects the bank’s strategy to stimulate the economy amidst rising inflation. Despite the increase, the central bank anticipates that inflation will be maintained below the midpoint of the 2.5%-7.5% target range in the immediate future.
In summary, Kenya’s annual inflation continues to rise due to increased non-core inflation, contrasting with stable core inflation rates. The central bank’s proactive interest rate reduction aims to bolster economic growth while maintaining inflation within targeted limits. As these economic indicators evolve, the central bank will closely monitor their implications for future monetary policy actions.
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