NAIROBI, Kenya, Feb 6 – The Central Bank of Kenya has raised its key lending rate by 50 basis points to 13 percent to contain inflationary pressure as well as stabilise local currency.
The Monetary Policy Committee (MPC) noted the need to hike the benchmark rate to achieve the target range of inflation, which stands between 2.5 and 7.5 percent.
“In addition, the MPC noted the continued, albeit reduced, pressures on the exchange rate and therefore concluded that further action was needed to stabilise prices,” the committee said.
“The MPC therefore decided to raise the Central Bank Rate (CBR) from 12.50 percent to 13.00 percent.”
CBK hopes the latest measure will reduce inflation to the 5 percent midpoint of the target range.
Last month, KNBS data showed that inflation in the country increased to 6.9 percent from 6.6 percent in December last year.
