NAIROBI, Kenya, June 10 – The Central Bank of Kenya (CBK) has indicated that its next decision on whether to raise, maintain or lower the benchmark lending rate will depend on incoming inflation data, particularly movements in food and energy prices.
Speaking after the latest Monetary Policy Committee (MPC) meeting, CBK Governor Kamau Thugge said the bank will closely monitor inflation developments before determining the appropriate monetary policy stance.
“Of course, as I’ve said before, our decisions on whether to tighten or even ease monetary policy are based on the data that we receive during the Monetary Policy Committee meeting. So it’s very difficult to say at this stage what will happen,” said Thugge.
“We’ll have to wait and see developments. We have to wait and see what happens with food prices.”
The governor expressed optimism that food inflation could moderate in the coming months, helping ease overall price pressures.
He also noted that a quick resolution of tensions in the Middle East could lead to lower global oil prices and reduce inflationary risks.
“We are keeping an eye on developments, certainly with regard to oil prices, but also in regard to the second-round effects. We’ll wait to see by the next time we meet what has happened to inflation, and it’s on the basis of that that we will take action in the next meeting of the MPC,” he added.
Kenya’s inflation accelerated to 6.7 percent in May from 5.6 percent in April, largely driven by higher food, transport and energy costs.
The rise in prices has been linked to elevated fuel costs following disruptions in global oil supply chains caused by the conflict involving Iran, Israel and the United States, as well as tensions around the Strait of Hormuz, a key global oil transit route.
The surge in international oil prices has translated into higher local pump prices. In April, the price of a litre of petrol rose from Sh178.28 to Sh206.97 before increasing further to Sh214.25 in the latest review.
The higher fuel costs have exerted pressure on transport, manufacturing and food prices, contributing to broader inflationary pressures across the economy.
