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.

Sign up for your email here and get weekly updates on African news sent to your inbox.

What are your thoughts on this story? Let us know what you think in the comments section below.

image credit: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. This is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. NEITHER THE COMPANY NOR THE AUTHOR WILL BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY DAMAGE OR LOSS ARISING OR ALLEGED TO OCCUR ARISING OUT OF OR RELATING TO YOUR USE OF OR RELIANCE ON ANY CONTENT, PRODUCTS OR SERVICES DESCRIBED IN THIS ARTICLE. We are not responsible.