The Central Bank of Kenya (CBK) has made stabilising the rate at which the Kenyan shillings exchange with other major currencies one of its top priorities for the first quarter of 2024.
The CBK made this known during its first Monetary Policy Committee (MPC) meeting for the year, which took place on Tuesday at its headquarters in Nairobi, the capital city of Kenya.
Led by Kamau Thugge, the governor of the CBK, the MPC said that it noted “that the overall inflation has remained sticky in the upper bound of the target range. The Committee further observed that all key components of inflation—fuel, food, NFNF—had increased in January.
“In addition, the MPC noted the continued, albeit reduced, pressures on the exchange rate and therefore concluded that further action was needed to stabilise prices.”
The apex bank added that even though its priority for this first quarter is to stabilise the prices of things through a series of inflation-managing policies, the objective of economic growth, which carries a significant degree of inflation pushing, will be properly managed.
It said, “The proposed action will ensure that inflationary expectations remain anchored while setting inflation on a downward path towards the 5.0 percent mid-point of the target range, as well as addressing residual pressures on the exchange rate.”
As a consequence of this objective, “the MPC decided to raise the Central Bank Rate (CBR) from 12.50 percent to 13.00 percent.”
It promised to closely monitor the impact of the policy measures as well as developments in the “global and domestic economy and stands ready to take further action as necessary in line with its mandate.”