CBK’s keeps Lending Rate at 7 Percent

The Central Bank of Kenya (CBK)  has maintained its benchmark lending rate at 7.0 percent amid economic optimism marking the eighth time the bank maintains the rate.

According to CBK governor, Patrick Njoroge, inflationary expectations remain well anchored within the target range alongside general optimism about economic growth prospects for 2021.

Speaking during  Monetary Policy Committee(MPC) in Nairobi, Njoroge noted that the current accommodative monetary policy stance remains appropriate, and thus the retention of the Central Bank Rate (CBR) at 7.0 percent.

“The MPC will closely monitor the impact of the policy measures, as well as developments in the global and domestic economy and stands ready to take additional measures as necessary,” the CBK governor stated.

Mr. Njoroge,who chaired the MPC meeting, explained that the leading indicators for the economy point to a relatively strong Gross Domestic Product (GDP) recovery in the first half of 2021 was supported by the strong performance of construction, information, communication, education, and real estate sectors.

According to the apex bank, the economy is expected to rebound this year, supported by the continued reopening of the services sectors including education, recovery in manufacturing, and stronger global demand.

“The CBK foreign exchange reserves currently stand at one trillion shillings (about US$.9.35 billion ) which is equivalent to 5.72 months of import cover. This continues to provide adequate cover and a buffer against short-term shocks in the foreign exchange market, “The CBK governor added.

By Philly Opere.