CBK holds benchmark lending rate at seven percent

The Central Bank of Kenya (CBK) kept its benchmark lending rate at seven percent on Wednesday, judging that its current accommodative stance remained appropriate, the Monetary Policy Committee said in a statement.

The committee has cut its main interest rate by a total of 125 basis points over two meetings to support the economy since the first case of the new coronavirus was reported in mid-March.

“The policy measures adopted in March and April were having the intended effect on the economy, and are still being transmitted,” the committee said in a statement.

The banking sector remains stable, it said, adding that fiscal stimulus measures unveiled by the government would kick in strongly in the financial year starting in July.

The committee said there were adequate foreign exchange reserves to cushion the country against short-term shocks, and it said fresh produce exports, a key source of hard currency, were starting to normalize.