Governor of Central Bank of Kenya, Patrick Njoroge has said despite higher tax and fuel cost, Kenya’s Monetary Policy Committee will remain neutral and expects consumer price increases to stay.
Speaking to reporters, Njoroge noted that “we are definitely not in the tightening stance” as the MPC meet on July 25.
The benchmark interest rate of 11.5% which helped bring down inflation to 5% in May from 8% was lowered by one percent to 10.5% last month, being the first reduction in three years.
This was largely due to the falling of inflation which was within the government target range.
East Africa biggest economy is expected to expand 6% in 2016 after 5.6% growth last year, while the current account deficit was expected to narrow to 5.5% of gross domestic product (GDP) from 6.8% in 2015.