Central Bank Holds Rates Steady Amid Persistent Inflation

In a move reflecting cautious optimism, the Central Bank of Kenya (CBK) maintained the Central Bank Rate (CBR) at 12.5% during its November 2023 Monetary Policy Committee meeting. Governor Dr. Kamau Thugge cited a gradual decline in inflation—from 9.6% in September to 7.7% in October—as justification for holding rates steady, though food and fuel prices remain volatile. The bank signaled readiness to intervene if inflation rebounds, particularly due to global oil shocks or adverse weather affecting agriculture. Analysts noted the decision supports economic growth while guarding against currency depreciation. The shilling had stabilized near Ksh148/$, aided by diaspora remittances and improved export earnings. CBK also reiterated its commitment to fiscal discipline, urging the national government to contain debt accumulation. Private sector credit grew by 10.2%, signaling renewed business confidence. The MPC projected inflation to remain within the 2.5–7.5% target band through Q1 2024, contingent on stable global commodity prices and effective domestic food production.