Central Bank to Meet over Benchmark Lending Rate

The Central Bank’s Monetary Policy Committee (MPC) is set to meet tomorrow, 27th May 2020, with the Analysts from Ghengis Capital predicting retention of the seven percent benchmark rate.

According to the analysts, the government might also need to adopt a wait-and-see attitude in a bid to be able to scrutinize how the Central Bank of Kenya’s previous changes and interventions are doing with the current economy.

While speaking to a local news agency, Mr. Churchil Ogutu, head of research at Ghengis Capital, said, “We expect a neutral policy stance in the MPC meeting.

“Inflation is still moderate and will not spike as there is no demand inflationary pressure at the moment,” he added.

The private sector inflation rate recorded a drop to 6.60 percent in March from a 6.37 percent rate recorded in February.

According to Ogutu, the private sector inflation level hit nine percent in April, the first time since July 2015. These might have been brought about by the increasing unemployment rate, fewer working hours in manufacturing sectors, all caused by the ongoing pandemic.

“If it is true, which I highly doubt then it means that the private sector can borrow for continuous growth because credit is affordable,” said Albert Bwire, an economics lecturer at the United States International University-Africa (USIU-Africa)