NAIROBI (Xinhua) --
Kenya’s apex bank on Monday lowered its
benchmark rate from 9.5 percent to 9 percent as economic output
was below its potential level while there was some room for
further accommodative monetary policy.
Central Bank of Kenya Governor and Chairman of the Monetary
Policy Committee (MPC), the apex bank’s top monetary policy
organ, said inflation expectations were well anchored within the
target range, and that economic growth prospects were improving.
noting the risk of perverse outcomes, the committee decided to
lower the Central Bank Rate (CBR) to 9.00 percent from 9.50
percent,” Njoroge said.
He noted that the
MPC will closely monitor the impact of this change in its policy
in the domestic and global economy will also be observed, and
the MPC stands ready to take additional measures as necessary,”
The MPC met on
Monday to review the outcome of its previous policy decisions
and recent economic developments against a backdrop of sustained
improvement in economic fundamentals: a strong pickup in
economic activity; increased optimism on the economic growth
prospects; favorable weather conditions; and continued
strengthening of the global economy.
Njoroge added that
month-on-month overall inflation remained within the target
range in May and June, largely due to lower food prices while
non-food-non-fuel (NFNF) inflation remained below 5 percent,
indicating that demand-driven inflationary pressures are muted.
The governor said
the foreign exchange market remains stable supported by balanced
inflows and outflows, and a continued narrowing in the current
Njoroge noted that
the current account deficit narrowed to 5.8 percent of gross
domestic product (GDP) in the 12 months to June from 6.3 percent
“It is expected to
narrow further to 5.4 percent of GDP in 2018, with strong growth
of agricultural exports particularly tea and horticulture,
resilient diaspora remittances, and improved tourism receipts,”