CBK governor sees inflation starting to fall

Central Bank of Kenya governor Patrick Njoroge when he appeared before the Senate Finance Committee in Nairobi on November 10, 2015. PHOTO | EVANS HABIL |  NATION MEDIA GROUP

By REUTERS

In Summary

• "We don't like the headline (inflation) number because we are being driven by el Nino and other things," Governor Patrick Njoroge told a news conference. "We expect it to come down. There is no doubt about it in my mind."
• The heavy rains have washed away or made impassable dirt roads, cutting off some farmers from markets. Some crops have also been damaged.

Kenya's inflation rate is likely to start falling when heavy rains stop, the central bank governor said on Wednesday.

Last month, year-on-year inflation rose to its highest level in 15 months, at 7.32 per cent, after prices of some foodstuffs shot up. Rains have been particularly heavy in recent weeks, blamed on the el Nino weather phenomenon.

READ: Inflation hits 15 month high

"We don't like the headline (inflation) number because we are being driven by el Nino and other things," Governor Patrick Njoroge told a news conference. "We expect it to come down. There is no doubt about it in my mind."

Heavy rains

The heavy rains have washed away or made impassable dirt roads, cutting off some farmers from markets. Some crops have also been damaged.

The central bank raised the benchmark lending rate by a total of 300 basis points in June and July after the shilling weakened sharply, helping stabilise the currency.

The governor said that a more stable shilling meant the impact of the currency devaluation was "dwindling", noting that non-food items had been dropping.