The Monetary Policy Committee of the Central Bank of Kenya has retained the Central Bank Rate at 7.00 percent.
The committee chaired by the central bank governor Dr. Patrick Njoroge pointed that the decision is informed by the current appropriate accommodative monetary policy stance .
The committee will continue to closely monitor the impact of the policy measures so far, as well as developments in the global and domestic economy, and stands ready to take additional measures as necessary.
The Committee will meet again in March 2021, but remains ready to re-convene earlier if necessary. It added that leading indicators for the Kenyan economy point to a recovery particularly in the fourth quarter of 2020, from the disruptions earlier in the year.
This recovery is supported largely by strong performance in the agriculture and construction sectors, resilient exports, and continued recovery in manufacturing and services.
The economy is expected to rebound strongly in 2021, supported by recovery in the services sectors particularly education, manufacturing, resilient agriculture and the ongoing policy support through the Government’s economic recovery plan. •
Month-on-month overall inflation stood at 5.6 percent in December 2020 compared to 5.3 percent in November. The inflation rate is expected to remain within the target range in the near term, supported by lower food prices and muted demand pressures.
The January 2021 MPC Private Sector Market Perceptions Survey revealed expectations of strong economic activity over the next two months, and greater optimism on the economic prospects in 2021.
Respondents attributed the improvement largely to the reopening of all learning institutions, expectations of acquiring a COVID-19 vaccine, the implementation of the Economic Stimulus Programme by the Government, resumption of most businesses that had stalled due to the pandemic, and strong agricultural production.
However, uncertainties were noted with regard to the increase in COVID-19 infections globally and emergence of new variants. •
The Survey of hotels and flower farms by the Central Bank of Kenya (CBK) conducted between January 13 and 15, showed continued recovery from the disruptions in April and May.
In particular, 97 percent of the respondent hotels are now open, compared to 96 percent in November 2020 and 35 percent in April, with continued re-engagement of employees particularly during the festive season in December. Average bed occupancy was reported at 26 percent in December 2020, compared to 11 percent in April.