NAIROBI, Kenya, June 22 – The International Monetary Fund (IMF) has recommended that the Central Bank of Kenya (CBK) reduce the number of Monetary Policy Committee (MPC) meetings from six to four annually to improve the quality of economic forecasts and better align policy decisions with key economic data releases.
According to the IMF, the current structure, which requires six MPC meetings each year and a full forecast round for every meeting, places significant pressure on the central bank’s forecasting team and can limit the depth of analysis supporting monetary policy decisions.
The fund noted that Kenya’s quarterly national accounts (QNA) data are released four times a year, while MPC meetings are held six times annually, creating a mismatch between the availability of key economic data and policy deliberations.
As a result, some forecasting rounds are compressed, leaving limited time for economists to update data, refine projections and develop alternative scenarios before policy decisions are made.
“The compressed timeline places significant pressure on the forecasting team, especially if major adjustments are needed,” the report noted.
The IMF observed that producing reliable forecasts and policy analysis typically requires five to seven weeks, a timeframe commonly adopted by inflation-targeting central banks that use Forecasting and Policy Analysis Systems (FPAS).
To address these challenges, the fund proposed that the CBK initially reduce MPC meetings to four per year, with each meeting aligned to the release of quarterly national accounts data and supported by comprehensive economic forecasts.
Under the proposed framework, the central bank would later increase meetings to eight annually by introducing four interim meetings between the main policy sessions.
The interim meetings would focus on updated data, nowcasts and near-term projections rather than full model-based forecasts, reducing the workload on analysts while allowing policymakers to respond to evolving economic conditions.
The report also recommends that each MPC decision be accompanied by a detailed press release explaining the committee’s rationale, with major meetings followed by a press conference led by the Governor and publication of the Monetary Policy Report.
The IMF argues that aligning forecasting cycles with data releases would improve the consistency, credibility and transparency of monetary policy decisions while giving policymakers more time to assess risks and alternative economic scenarios.
