Kenya’s economic growth is expected to decline significantly this year, owing to the Coronavirus pandemic currently dealing heavy blows to the economy.
According to the latest revised reports by the Central Bank of Kenya, a 3.4 percent growth is projected from the initial 6.2 percent after as a reduced demand by Kenya’s main trading partners, disruptions of supply chains, and domestic production is on the upward trend.
“The fundamental concerns and anxieties center on the health impact, job losses, and duration of the crisis,” CBK’s Monetary Policy Committee said in a statement.
Severe volatility has hit the foreign exchange market primarily due to uncertainties concerning the impact of COVID-19 and a significant strengthening of the US dollar in the global markets.
The CBK recently announced strategies set aside to help in supporting the economy, as the health crisis in the country poses adverse challenges to the economy and financial sector.
Previously, the Bank had announced that it had revised various regulations among them the cash holding requirements and reduction of the lending rates to 7.25 percent in a bid to protect the economy from a downturn.
Analysts had anticipated the reduction in the lending rate on the back of mounting global risks but said the cut would not bear the intended consequences on the economy.
The CBK, through its governor Dr. Njoroge stated that it would release Sh35.2 billion in additional liquidity, which would be made available directly to banks.
Some of the hard-hit sectors include tourism, aviation, and export markets, as they have a higher reliance on the European market.
