Kenya's month-on-month inflation increased to nine per cent in February,
2017 from seven per cent in January, driven by an increase in food
prices.
TEA GRAPHIC | NATION MEDIA GROUP
By JAMES ANYANZWA
In Summary
The Central Bank of Kenya voted to keep the policy lending
rate unchanged at 10 per cent on Monday, on worries of slowed growth in
consumer spending and a surge in inflation beyond the 7.5 per cent upper
limit of the government’s target range.
This is the third consecutive time the Bank’s
monetary policy committee (MPC) has left the Central Bank Rate (CBR)
untouched since the government passed a law fixing lending rates at four
percentage points above the benchmark lending rate in September last
year .
The committee noted that food prices are
expected to remain on an upward trend due to the prevailing drought
conditions in the country, pushing overall inflation outside the
government’s target range.
Overall month-on-month inflation increased to
nine per cent in February from seven per cent in January, driven by an
increase in the prices of food including tomatoes, Kale (sukuma
wiki),sugar, maize, oranges, cabbages, Irish potatoes and milk.
“Food prices are expected to remain elevated
in March and April due to the dry weather conditions, but ease with the
long rains,” said CBK Governor Dr Patrick Njoroge.
According to CBK, the contribution of trade,
manufacturing, real estate and private household sectors to the total
credit growth declined gradually to 4.6 per cent in February 2017
compared with 13.6 per cent in July 2015. These four sectors account for
60 per cent of total credit to the private sector.
Commercial banks also reduced lending to
businesses and individuals and increased their share of loans to
corporates, with the average maturity of loans also shifting to short
term lending.
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