The Central Bank of Kenya retained the key lending rate at 7pc during yesterday’s meeting. The Kenyan monetary policy committee said this was a result of a positive desired outcome on the economy from the mitigation measures that were deployed in March.
“The MPC concluded that the current accommodative monetary policy stance remains appropriate, and therefore decided to retain the Central Bank Rate (CBR) at 7.00 percent,” reads the MPC statement.
CBK says the banking sector remains stable with strong liquidity and capital adequacy ratios. The ratio of gross non-performing loans (NPLs) stood at 13pc in May compared to 13pc in April.
The MPC noted a significant rebound in exports in May and so far in June, compared to the abysmal performance in April.
At the same time, the committee revealed that as a result of emergency measures it announced in mid-March, personal loans worth Sh199.1 billion had been restructured by May.
The committee further revealed that the foreign exchange reserves that stand at $9,210.6 million continued to cushion the country against the short-term shocks in the foreign exchange market.
The team welcomed the extension of emergency measures introduced in March saying the changes in mobile money transactions had a positive impact and facilitated official and personal transfers to vulnerable households.
CBK also applauded the economic stimulus announced by the Treasury CS during the Budget 2020/21. “The Economic Stimulus Programme targets to support the growth of key sectors of the economy including agriculture and food security, infrastructure development, tourism, manufacturing, education, health, information and communications, and the MSMEs,” MPC ‘s chair, Patrick Njoroge said.
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