File photo for representational purposes only.
Nairobi: The Central Bank of Kenya (CBK) on Tuesday reduced its benchmark lending rate to 9.5 percent from 9.75 percent to stimulate economic activity and boost private-sector lending in the country.
CBK Governor Kamau Thugge, who chaired the Monetary Policy Committee (MPC) meeting, said there was room for further monetary easing to reinforce earlier measures aimed at expanding bank credit to the private sector and supporting growth, while keeping inflation expectations anchored and the exchange rate stable.
"Growth in credit to key sectors of the economy, particularly manufacturing, trade, building and construction, and consumer durables, improved in June and July," Thugge said in a statement released in Nairobi, Kenya's capital.
The MPC noted that central banks in major economies are also lowering interest rates, albeit at a more cautious and uneven pace, depending on inflation and growth prospects.
Kenya's overall inflation rose to 4.1 percent in July from 3.8 percent in June, remaining below the 5.0 percent mid-point of the target range, Thugge said.
The apex bank said that it will closely monitor the impact of the rate cut and developments in the global and domestic economy, and stands ready to take further action in line with its mandate.
