This archive report was first published on 12 November 2019.
Published on November 12, 2019, the Central Bank Committee is gearing up for its bi-monthly meeting in November, marking the first MPC meeting after Parliament repealed the rate cap law.
CBK Governor Patrick Njoroge has expressed confidence that the committee has more clarity to make informed monetary policy decisions. This comes after the MPC previously expressed concerns that cutting interest rates could have adverse effects due to the interest rate cap law.
"The MPC had signalled that they see the potential for easing monetary policy, in part, because the fiscal policy was being tightened," Patrick Njoroge told Reuters in an interview in Singapore.
As the chairperson of the MPC, Njoroge emphasized that the committee has a clear direction on monetary policy following the repeal of the interest ceiling. The committee will rely on economic data and other criteria to make a decision later this month.
"There was still the question about a perverse monetary reaction. Now that the repeal has come through, there isn’t any question anymore about the perverse reaction to monetary policy, so the direction is clear," Njoroge stated.
The Central Bank is also exploring partnerships with other organizations, such as the IMF, before making a decision. The rate cap repeal is expected to unlock a stand-by credit facility with the IMF, paving the way for the CBK to resume its role in controlling inflation and money circulation.
