Kenya’s Apex Bank Hikes Key Policy Rate by 50bps
The fight against the hot headline inflation rate is getting tougher in the frontier and emerging markets as regulators in Africa are responding swiftly with interest rate hikes.
After its monetary policy committee meeting, the Central Bank of Kenya (CBK) Monday said it has decided to raise Kenya’s Bank Rate by 50 basis points to 7.50%. READ: Moody’s Affirms Kenya’s B2 Ratings; Outlook Remains Negative
Today’s rate hike marks the first adjustment made to the benchmark rate since 2015. The upward adjustment is higher than market expectation following the pattern seen in Nigeria recently where the policy committee hiked the rate by 150 basis points.
In a statement, Kenya’s monetary authority noted that it took the decision against a backdrop of a changed global outlook.
The committee considered elevated global inflationary pressures, heightened geopolitical tensions, rising commodity prices, the COVID-19 pandemic and measures taken by authorities around the world in response to these developments.
Kenya’s overall inflation increased to 6.5% in April from 5.6% in March, mainly due to higher food and fuel prices, pointed out CBK in its policy statement. # Kenya’s Apex Bank Hikes Key Policy Rate by 50bps
