Kenya's central bank says inflation unaffected by oil price spike

CBK Governor Patrick Njoroge
The central bank governor Patrick Njoroge said oil price spike caused by an attack earlier this month on Saudi Arabia’s largest oil processing facility would have little impact on inflation.

“It won’t have a significant impact on inflation,” Patrick Njoroge told a news conference.

The central bank still expected the economy to grow by 6 per cent this year, Njoroge said, citing good performance in the tourism sector, a top hard currency earner and employer in the country.

The central bank would review that growth forecast after the statistics office issues growth numbers for the second quarter at the end of this month, he added.

SEE ALSO :Inflation rises in October as food prices go up

He warned, however, that there were significant risks, including the U.S.-China trade war and the ensuing softening of the global economy.

“The external sector is worsening dramatically,” he said.

The governor reiterated policy makers’ view that ongoing efforts to tighten the government’s fiscal policy could lead to monetary easing.

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The bank held its benchmark lending rate at 9.0 per cent on Monday, saying inflation was well anchored within the government’s preferred range and that the economy was operating close to its potential.

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InflationCentral Bank of KenyaPatrick Njoroge