JULY 31, 2018: KENYA BENCHMARK. INTEREST. RATE DOWN TO 9%

The Monetary Policy Committee of the Central Bank of Kenya rose from its latest meeting on Monday July 30 2018 with a decision to lower Central Bank interest rate to 9% from 9.50%.

According to the Governor of the Central Bank who is the chairman of the MPC. DR Patrick Njoroge, the decision was predicated on positive growth signals from the economy and inflation growth within target.

He said the decision was backgrounded by improved economic fundamentals, strong pick up in economic activuties   increased optimism, favourable weather and still improving global prospects despite trade tensions between leading economies.

In a press release issued after the meeting, he said that inflation rate in Kenya was within target in May and June at 4.0% and 4.3% respectively.

What's more, according to him, the foreign market remained stable for Kenya with current account deficit continuing to narrow to 5.8% in 12 months to June 2018 from 6.3% to March 2018.

He expects this deficit to reduce further in the months ahead resulting in closing 2018 at around 5.4% of gross domestic product. 

The narrowing of the deficit and continued optimism, he added, rests more on agriculture export potentials especially for tea, horticulture and robust remittance from Kenyans in diaspora and improved tourism.

Currently, Kenya's foreign reserves stands at $8.834bn, enough for 5 to 9 months imports. Besides,  stand by arrangement with the International Monetary Fund for $989.8m provides additional cover.

The growth in Kenya's GDP, he added, was 5.7% in the first quarter of this year compared to 4.8% at the same time last year.

As at morning of Tuesday July 31, 2018 Henates gathered from the Bank's website that the $ was 100.4083 Ksh; the  British pound was Ksh 131.8261 and the Euro was Ksh 117.4831.

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