NAIROBI, Kenya, May 29 – The Central Bank of Kenya (CBK) has retained its base lending rate at 9.5 percent after inflation dropped last month.
CBK’s Monetary Policy Committee (MPC) said on Monday that the tightening of monetary policy in March 2023 to anchor inflation was showing some signs of improvement in the economy.
It also added that the government’s move to allow duty-free importation of certain food items, such as sugar, will ease inflationary pressure.
“The Committee 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,” MPC Chairman Patrick Njoroge said.
“The Committee will meet again in July 2023, but remains ready to reconvene earlier if necessary.”
The retention of the rate came after overall inflation declined to 7.9 percent last month from 9.2 percent in March.
Similarly, food inflation dropped to 10.1 percent from 13.4 percent in the review period.
The cooling of inflation is attributed to lower prices of vegetables boosted by ongoing rains and an improved supply of select non-vegetable food items.
“The Survey of the Agriculture Sector conducted in the first half of the month, revealed that the prices of key food items had declined,” MPC added.
“Additionally, respondents expect the supply of most vegetables to increase in the coming months on account of the rains.”