The Central Bank of Kenya (CBK) on Monday raised its benchmark lending rate to 7.5 percent from 7 percent amid the rising global commodity prices.
Patrick Njoroge, the CBK governor, who chaired the Monetary Policy Committee (MPC) meeting in Nairobi, the capital of Kenya, noted the elevated risks to the inflation outlook and concluded that there was scope for a tightening of the monetary policy in order to further anchor inflation expectations.
“The MPC reviewed the outcomes of its previous decisions and the measures implemented to mitigate the adverse economic impact and the financial disruptions,” Njoroge said in a statement.
The committee met against a backdrop of a changed global outlook, geopolitical tensions, rising commodity prices, the COVID-19 pandemic and measures taken by authorities around the world in response to these developments.
The MPC also noted the adverse impact of the ongoing Russia-Ukraine conflict and other global disruptions on the Kenyan economy through increases in commodity prices particularly fuel, wheat, edible oils and fertilizer.
Njoroge observed that the global economic outlook has become more uncertain, reflecting the impact of the ongoing Russia-Ukraine conflict, uncertainty about the required policy responses in the advanced economies, and persistent supply chain disruptions.
The apex bank said that it 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.
