Kenya’s Monetary Policy Remains Limited

Hot Blooded Business

Last year, calls for monetary policy accommodation were on the rise given the need to prop up economic growth at a time of subdued business activity. However, the Central Bank’s reluctance could have been linked to its aversion towards the protracted electoral cycle and the capped interest rate environment that limited the effective transmission of monetary policy.

A better political landscape and improving macroeconomic variables has since improved investor sentiments towards the economy and could have also paved way for the much needed 50bps policy rate cut in March 2018. This was also complemented by prospects of a healthy global economy, rising commodity prices and a globally weak US dollar (y/y). It also looked more than likely that a policy rate cut would do more good than harm despite the capped interest rate environment.

That said, in its latest policy setting meeting this May, the monetary policy committee (MPC) left…

View original post 676 more words

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s