This archive report was first published on 25 June 2020.
On June 25, the Central Bank of Kenya (CBK) released its latest economic projections, providing a glimmer of hope for Kenya's economic recovery.
The projections, which were shared by the CBK's Monetary Policy Committee (MPC), chaired by Governor Patrick Njoroge, showed a steadily improving trajectory following the Covid-19 pandemic.
According to the report, strong growth was experienced in the first quarter of 2020, with the impact of the economy being most pronounced in April 2020.
Despite the restrictions implemented due to the pandemic, Kenya's export goods improved by 4.1% between January and May 2020.
Receipts from tea and horticulture exports increased by 15.2% and 22.7% respectively compared to May 2019, as reported by the CBK.
The MPC stated that the economic stimulus package is working well as a buffer, which was used to justify maintaining the Central Bank Rate (CBR) at 7%.
"The Committee noted that the package of policy measures deployed since March were having the intended effect on the economy, and will be augmented by the announced fiscal measures," reads an excerpt from the statement signed by CBK Governor Patrick Njoroge.
The CBK's decision to maintain the Central Bank Rate (CBR) at 7% was a welcome move in catalysing demand through affordable credit, but how effectively the decision has cascaded to the common mwananchi remains a concern for many Kenyans.
On April 29, the MPC lowered the Central Bank Rate (CBR) to 7%, citing the need to augment its accommodative monetary policy stance as the key reason.
However, the repeal of section 33B of the Banking Act gave banks the leeway to choose how much more to charge its borrowers.
