At its December meeting the CBK increased the interest rate by 150bps to 18.00%, after hiking by 550 basis points and raising the Cash Reserve Ratio by 50bps to 5.25%at its November meeting . That move followed a 400bp increase of the interest rate to 11.00% at its October meeting, after raising 75bps in September, and previously increasing, and subsequently decreasing the discount window rate by 75 basis points to 6.25%.
Kenya experienced annual headline inflation of 18.93 in December, down slightly from 19.72% in November, but still higher than 18.91% in October, 17.3% in September, 16.7% in August, up from 15.5% in July, and up sharply from 9.19% in March this year, according to inflation data from the Kenya National Bureau of Statistics. The Central Bank of Kenya has an inflation target of 5 percent.
Kenya reported seasonally adjusted GDP growth of -4.6% in Q2, compared to +2% in Q1. A Kenyan Ministry of Finance official noted that Kenya is expected to record economic growth around 5-5.5% in 2011, and 6% in 2012.
The Kenyan Shilling (KES) has weakened about 8% against the US dollar over the past year (having weakened by as much as 31% at the bottom); meanwhile the USDKES exchange rate last traded around 87.13