Kenya Central Bank Holds Interest Rates as Economic Activity Remains Strong

Kenya’s Central Bank has decided to leave the country’s headline interest rate unchanged at 7%. The monetary policy body says its current accommodative policies are good enough.

Like other central banks around the world, policymakers in the East African nation put in place a range of easing measures at the onset of the coronavirus pandemic in March and April, to try to cushion damage to the economy wrought by the crisis.

The bank said in a statement that indicators for the third quarter of the year showed a strong recovery in activity and the economy is projected to keep growing so there is no point to make changes to the headline rate.

Exports of goods have remained robust despite the pandemic, growing by 0.8% in the period January to August 2020 compared to a similar period in 2019.

Receipts from tea exports over this period rose by 17.1% with increased output. Flower exports for the period September 1 to 27 were 141.3% of the volume in September 2019.

Remittances were strong at $274.1 million in August 2020 compared to $214.3 million in August 2019. For the eight months to August 2020, remittances were higher by 6.6 percent compared to a similar period in 2019.

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