The Central Bank of Kenya (CBK) has left its benchmark rate unchanged at 7% for the fifth time this year. This came at the end of its Monetary Policy Committee meeting. The current rate, the bank says, is having the intended effect on the economy from its initial implementation in March.
Central Bank Governor, Patrick Njoroge noted that Inflation has remained within the target range of 2.5% and 7.5% and is expected to stay within the range in the near term, “supported by lower food prices and muted demand pressures.”
Economic indicators show a recovery in Kenya’s economy in the second half of 2020. Exports have increased by 2.8% in the January to October period, compared to the same period in 2019.
Foreign exchange reserves have slightly declined and currently stand at $7,952 million, equivalent to 4.89 months of import cover. Despite the decline, CBK says that the forex reserves “continue to provide adequate cover and a buffer against short-term shocks in the foreign exchange market.”
According to the monetary policy committee, Kenyan banks have strong liquidity and adequate capital and the sector has shown resilience in these harsh economic times.