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Central Bank of Kenya Raises Key Rate by 75 Basis Points – Emerging Markets Bitcoin News

The Central Bank of Kenya’s Monetary Policy Committee recently announced that it had raised the central bank’s interest rate by 75 basis points from 7.5% to 8.25%. The committee cites rising inflationary pressures and rising global risks, as well as the potential impact on domestic economies, to justify its decision to act.

Inflation pressure builds

After its latest meeting, the Central Bank of Kenya’s (CBK) Monetary Policy Committee (MPC) announced that it had approved an increase in the Central Bank Rate (CBR) from 7.50% to 8.25%. The MPC, chaired by central bank governor Patrick Nyoroge, has approved interest rate adjustments to protect Kenya from a collapsing global economy.

With the upward CBR adjustment, the Central Bank of Kenya appeared to follow in the footsteps of the Central Bank of Nigeria, which recently raised the monetary policy rate by 150 basis points. However, unlike the CBN, which raised interest rates after inflation jumped from 17.01% in July to 20.52% in August, Kenya’s MPC said that if the East African country’s inflation rate were below 20%, the But we have taken steps to increase the CBR by 75 basis points. It rose 0.2% from 8.3% in July to 8.5% in August.

To justify its decision, the MPC cites rising inflationary pressures and rising global risks, as well as the potential impact on domestic economies. In a statement, the MPC said it took action after confirming there was “room to tighten monetary policy to further stabilize inflation expectations.”

‘More optimism’

Kenya, like the rest of Africa, faces significant global uncertainties, but two surveys, the CEO Survey and the Private Sector Market Perceptions Survey, report that “business activity and economic growth in 2022 , suggesting that there is greater optimism about the outlook for ”

In the meantime, CBK warned that it could be forced to take further measures if the situation calls for it.

“The Commission will closely monitor the impact of policy measures and developments in the global and domestic economies and stand ready to take additional measures if necessary. We stand ready to meet again as soon as necessary,” the statement said.

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Terrence Jimwala

Terence Zimwara is an award-winning journalist, author and writer from Zimbabwe. He has written extensively on the economic problems of several African countries and how digital currencies can provide an escape route for Africans.







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Central Bank of Kenya Raises Key Rate by 75 Basis Points – Emerging Markets Bitcoin News

Source link Central Bank of Kenya Raises Key Rate by 75 Basis Points – Emerging Markets Bitcoin News

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