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Central Bank to hold next rate-setting meeting on July 7

BUSINESS
By Frankline Sunday | June 26th 2015

The Monetary Policy Committee (MPC) of Central Bank will meet in 10 days to review the country’s benchmark lending rate amid renewed pressure on the Kenya shilling.

The banking industry regulator announced yesterday that the MPC will hold its next rate-setting meeting on July 7, coming less than a month after the June 9 sitting where the committee raised the benchmark lending rate 150 basis points to 10 per cent from the 8.5 per cent that has been held since May 2013.

The rate hike came on the back of a drop in the shilling to more than three-year lows prompting the new rate in an attempt to stem further rising inflation and ease the pressure on the shilling.

The rate change was the first since a cut two years ago. The last rate hike was in December 2011.

The July meeting will also be the first after Parliament approved the nomination of US-educated economist Patrick Njoroge, an adviser at the International Monetary Fund, as governor of the Central Bank.

It was not immediately clear if Njoroge will chair the meeting. Haron Sirima, one of the bank’s deputy governors, chaired the last meeting and he may still do so if Njoroge will not have assumed office.

Central Bank organ

The Monetary Policy Committee is the organ of the Central Bank of Kenya responsible for formulating monetary policy. The Committee was formed vide Gazette Notice 3771 on April 30, 2008 replacing the hitherto Monetary Policy Advisory Committee (MPAC) The Chairman of the MPC convenes a meeting of the committee at least once every two months and will convene an additional meeting if requested in writing by at least four members. The quorum for meetings of the Committee is five members, one of whom must be the chairman or vice chairman.

The decisions of the committee in these meetings are communicated to the public through press releases from the chairman - always the governor.

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