NAIROBI, Kenya, Aug 10 – The Kenya Bankers Association (KBA) is urging the Central Bank of Kenya (CBK) to maintain its base lending rate at 8.75 percent, citing stable inflation, resilient economic growth and a stable shilling.
KBA said overall inflation remains within the target range, while domestic economic growth remains resilient, reducing the need to either lower or raise the Central Bank Rate (CBR).
The association also said the Kenya shilling remains stable, supported by resilient external inflows and stronger foreign exchange reserves despite a widening current account deficit.
“With inflation currently anchored within the target range and minimal threats to its escalation in the near term, as well as sustained exchange rate stability, we view that maintaining the current stance of monetary policy in keeping the CBR unchanged at 8.75% would be appropriate to support private sector credit growth and strengthen economic activity,” KBA said in a statement ahead of the Monetary Policy Committee (MPC) meeting tomorrow.
In February, the CBK’s MPC reduced the CBR from 9 percent to 8.75 percent to boost private sector credit growth.
It later retained the CBR at 8.75 percent in April, citing rising global risks linked to the ongoing Middle East conflict, and the need to anchor inflation expectations and maintain exchange rate stability amid pressure from higher global oil and fertiliser prices.
“Having considered these developments, the Committee concluded that the current monetary policy stance… remains appropriate to ensure that inflation expectations remain anchored within the target range,” the MPC said earlier.
