Central Bank of Kenya Lifts Interest Rate 25bps to 6.25%
The Central Bank of Kenya raised the benchmark lending rate by 25 basis points to 6.25% from 6.00% previously. The central bank also lifted the cash reserve ratio, the percentage of deposits that banks must hold at the central bank, by 25 basis points to 4.75%. The Bank said: "Having noted the success of its previous monetary policy stance the Committee continues to endorse a tight stance so that inflation expectations are tamed and exchange rate stability enhanced."
Previously the Bank increased the interest rate by 25 basis points in March to 6.00%. Kenya recorded inflation of 12.95% in May, compared to 12.05% in April and 9.19% in March, according to inflation data from the Kenya National Bureau of Statistics. The Central Bank of Kenya has an inflation target of 5 percent.