Central Bank to raise lending rates

The Central Bank of Kenya’s (CBK) Monetary Policy Committee is scheduled to meet Wednesday for its third consecutive monthly meeting.

The meeting will be the second to be chaired by the CBK Governor Dr. Patrick Njoroge.

Since May, the MPC has raised the Central Bank Rate (CBR), which is the CBK’s benchmark lending rate, by a cumulative 3 percentage points to stem the risk of inflationary pressure and stabilize the shilling’s exchange rate.

Currently, the CBR is pegged at 11.5 percent.

According to analysts polled by Reuters, the CBK’s Rate Setting Committee is expected to raise the CBR by half a percentage point to 12 percent.

The Kenyan shilling has shed off 13 percent of its value to the dollar since the beginning of this year, raising worries about the spill-over effect of the shilling’s depreciation on the country’s cost of living.

This has happened even having in mind that Kenya is highly dependent on imports ranging from fuel to manufacturing inputs.