By Kepha Muiruri For Citizen Digital
The Monetary Policy Committee (MPC) noted on Monday that the current accommodative monetary policy stance remains appropriate to support the continued rebound of the economy.
“The committee noted that inflation expectations remained anchored within the target range, and leading economic indicators showed continued robust performance,” the CBK stated.
According to the CBK, leading economic indicators continue to point to continuing economic recovery in the second half of the 2021 after the Kenyan economy expanded by 5.3 per cent in the first half cancelling last year’s contraction in a similar period.
MPC surveys conducted earlier in the month which cover market perceptions, CEOs and hotels have revealed the highest level of optimism about economic growth prospects since March this year.
“Respondents attributed this optimism to sustained recovery across different sectors, the lifting of the curfew, reduced COVID-19 infection numbers and increased vaccinations, continued government infrastructure spending, and the global economic recovery which is expected to boost export demand,” added the CBK.
“Additionally, respondents expect consumer demand to pick up during the festive and back-to-school seasons. Nonetheless, while concerns about the pandemic have eased, respondents remained concerned about the dry weather conditions and increased political activity.”
Growth in private sector credit has increased to 7.8 per cent in October 2021 from seven per cent in August with the sectors of manufacturing, consumer durables, transport & communication and business services being the largest recipients of new credit in the period.
Meanwhile, commercial banks have continued to record improved asset quality with the share of non-performing loans (NPLs) to gross loans falling to 13.6 per cent in October from 13.9 per cent in August.
The lenders have recorded most repayments and recoveries in trade, manufacturing, personal & household and financial services.
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