CBK spares borrowers rates increase
Business
By
Brian Ngugi
| Jun 06, 2024
Borrowers have been spared the higher cost of loans after the Central Bank of Kenya (CBK) retained its benchmark signal rate at 13.00 per cent, following Wednesday's Monetary Policy Committee (MPC) meeting.
CBK said the current monetary policy stance has reduced the threat of money-driven inflation, even as banks cut loans to customers and bad loans reached record levels - pointing to a worsening debt crisis afflicting borrowers.
In a statement, the CBK said inflation was expected to decline further in what would be a huge relief for cash-strapped Kenyans.
"The MPC concluded that the current monetary policy stance will ensure that overall inflation remains stable around the mid-point of the target range in the near term while ensuring continued stability in the exchange rate. Therefore, the committee decided to retain the Central Bank Rate (CBR) at 13.00 per cent," said CBK governor and chairman of MPC Kamau Thugge.
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Overall inflation or the cost-of-living measure rose slightly to 5.1 per cent in May 2024, compared to 5.0 per cent in April.
Food inflation stood at 6.2 per cent in May compared to 5.6 per cent in April, reflecting increases in prices of some vegetables due to supply disruptions attributed to heavy rains.
The MPC noted that its previous measures have lowered overall inflation to the mid-point of the target range, stabilised the exchange rate, and anchored inflationary expectations.