Kenya: Central Bank of Kenya decreases rates in February
Monetary policy easing continues: At its meeting on 10 February, the Central Bank of Kenya (CBK) decided to lower the Central Bank Rate (CBR) by 25 basis points to 8.75% from 9.00%.
Below-target inflation drives cut: The Bank concluded that there was scope for a further easing in the monetary policy stance, as inflation has recently been slightly below the 5.0% midpoint of the CBK’s target range, while core inflation has been less than half the midpoint.
CBK set to cut rates further: The CBK did not provide specific forward guidance on the future direction of interest rates. All our panelists expect further cuts this year, with the spread ranging from 25 to 75 basis points. Expected rate cuts from the U.S. Federal Reserve will allow the CBK to reduce its own rate further without putting excessive pressure on the shilling. The Committee will reconvene in April.