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CBK monetary policy committee leaves interest rates unchanged

NAIROBI, Kenya, Sept 18 – Central Bank of Kenya’s monetary policy committee has retained the central bank rate at 10 percent effectively leaving interest rates unchanged.

The committee says the decision to maintain the CBR is to anchor inflation expectations even as the regulator continues to closely monitor developments in the global and domestic economy.

CBK Governor Dr. Patrick Njoroge has said the committee has welcomed the preliminary results of the studies on the slowdown in the growth of private sector credit, and the impact of the interest rate caps.

He says the committee has welcomed the results of the studies and made recommendations which will be finalized in the near term.

Meanwhile, the growth of credit to the private sector recorded a slight increase to 1.6 percent over the 12 months to August 2017 from 1.4 percent in July 201, reversing the downward trend since August 2015.

Average commercial banks’ liquidity and capital adequacy ratios stood at 45.6 percent and 19.0 percent, respectively, in August 2017.

“The distribution of liquidity in the sector is expected to continue to improve but credit risk remains elevated as some large corporates continue to restructure their borrowings,” said Dr. Njoroge.

The committee expects the macroeconomic environment to be supported by a recovery in agriculture due to normal weather conditions, infrastructure spending, and stability in the global economy.

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