This archive report was first published on 25 July 2019.
On July 24, 2019, the Central Bank of Kenya held its benchmark lending rate at 9.0 percent, marking the sixth consecutive time the rate has been left unchanged. This decision was made by the monetary policy committee, which stated that inflation expectations were within the target range and the economy was operating close to its potential.
According to a poll of 15 analysts and economists, the rate was expected to remain unchanged. The bank also noted the need to be vigilant regarding the potential effects of recent fuel price increases, the ongoing demonetization process, and increased external uncertainties.
Following the announcement, Governor Patrick Njoroge began his second four-year term in office. The inflation rate rose slightly to 5.70 percent year-on-year in June, staying within the government's preferred band of 2.5-7.5 percent in the medium term.
The government forecasts the economy will expand by 6.3 percent in 2019, matching the growth rate of the previous year. The Kenya National Bureau of Statistics reported that the economy grew 5.6 percent year-on-year in the first quarter, down from 6.5 percent in the same quarter last year.
The Central Bank of Kenya also predicted that the current account deficit would narrow to 4.5 percent of GDP in 2019, down from 5.0 percent in the previous year. This forecast was slightly revised from the bank's May prediction of a 4.8 percent deficit.
