The Central Bank’s Monetary Policy Committee has resolved to hold the base lending rate at 8.75 percent for the next two months, pausing the recent cycle of monetary easing in the country. According to the Central Bank Governor, who also chairs the Monetary Policy Committee, the conflict in the Middle East has disrupted global supply chains, leading to increased energy prices and transportation costs, which have contributed to higher inflation. Although Kenya’s overall inflation is expected to remain within the target range in the near term, the committee says its decision is in line with central banks across the globe. The decision, however, contrasts with industry expectations, as stakeholders had been calling for monetary tightening to counter inflationary pressures.
