NAIROBI (Xinhua) -- Kenya’s overall inflation
rate is expected to drop to within the target range of 7.5 percent
in the next two months, the country’s apex bank on Tuesday.
Central Bank of Kenya (CBK) Governor Professor Patrick Njoroge
told a media briefing in Nairobi that the decline from the current
level of 9.2 percent will be largely driven by lower food prices.
"As of now, Kenya is on very solid ground to reduce its inflation
rate to less than 7.5 percent. Currently, it is difficult to get
more precise projections because they will depend on the price of
the common staples food," Njoroge said.
The apex bank has set an inflation target of between 2.5 and 7.5
Njoroge added that overall inflation in the country has been on
downward trend lately due to the impact of the recent rains on food
production as well as government measures to control rising food
He noted that the price of agricultural commodities are not
driven by monetary dynamics unlike other commodities.
On Monday, the Central Bank of Kenya’s Monetary Policy Committee
retained the benchmark rate at 10 percent in order to continue to
anchor inflation expectations.
According to the Governor, the agricultural sector is not
performing as well as the other sectors of the economy despite the
lower food prices.
"The other sectors such as manufacturing, real estate,
Information and Communication Technology and transport have
continued to show dynamism even with the slowdown in private sector
lending," Njoroge said.
Kenya shilling steadies on central bank move
NAIROBI (Xinhua) -- The Kenya shilling was steady against the
U.S. dollar on Tuesday following support from the central bank amid
The local unit traded at an average of 103.90, largely the same
level it was at the start of the week on Monday.
The apex bank during the Tuesday trading session quoted the
shilling at 103.91, nearly the same level the local unit was on
On the other hand, commercial banks placed the value of the Kenya
shilling at between 103.90 and 104.05 as traders noted a surge in
inflows, especially from investors seeking to buy Treasury bonds.
Analysts attributed the firmness of the shilling mainly to
intervention from the Central Bank of Kenya (CBK).
CBK Governor Patrick Njoroge in a press conference in the capital
Nairobi said Kenya’s foreign exchange reserves currently standing at
7.8 billion dollars, an equivalent of 4.63 months of import cover,
were adequate to cushion the shilling.
Njoroge blamed the turbulence the shilling is currently facing to
intense speculation ahead of the general election.
However, with the support from the central bank, analysts noted
that the shilling is set to stabilize in the coming days.
The apex bank is also expected not to allow the currency to fall
below a level that would destabilize the market.