Borrowers have been spared the higher cost of loans after the Central Bank of Kenya (CBK) retained its benchmark signal rate at 10.50 per cent following Wednesday’s Monetary Policy Committee (MPC) meeting.
Overall inflation in Kenya declined to 7.3 per cent in July 2023 from 7.9 per cent in June, driven by lower food and non-food non-fuel inflation.
The inflation rate returned to the target range of 2.5 per cent to 7.5 per cent.
"The MPC noted that inflation is already within the target band and is expected to decline further as food inflation is expected to come down...The committee also noted that inflationary pressures had eased as non-food non-fuel inflation declined," said CBK governor and chairman of MPC Kamau Thugge.
"The committee further noted that the impact of the tightening of monetary policy in June 2023 to anchor inflationary expectations was still transmitting in the economy. In view of these developments, the MPC decided to retain the Central Bank Rate (CBR) at 10.50 per cent."
Data by the regulator, however, indicated that there was limited private sector access to credit amid the recently hiked benchmark rate.
Private sector credit grew by 12.2 per cent in the 12 months to June this year compared to 13.2 per cent in May, said CBK.