Tuesday, May 31, 2011

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.


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