Kenya: Central Bank to Review Monetary Policy in September

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Central Bank of Kenya’s (CBK) policy-making committee will meet next in September and would be likely reviewing the benchmark interest rates for the next two month

“The next Monetary Policy Committee [MPC] meeting will be held on September 20th, 2016,” said a dispatch from the CBK on Friday.

The MPC meetings are held once every two months unless the committee decides to call them more often, usually in response to turbulence in the foreign exchange market.

The MPC is the independent rate-setting arm of the regulator.

In the last meeting held on July 25, the MPC cut the Kenya Bankers Reference Rate (KBRR) by 0.97 percentage points in what was interpreted as its effort to put pressure on commercial banks to cut lending rates at a time that legislators are keen on controlling the price of money.

“The CBK has revised the KBRR to 8.90 per cent from 9.87 per cent, effective from July 25, 2016,” said Mr Njoroge in a statement following the meeting last month.

The MPC however did not cut the Central Bank Rate (CBR) that remains at 10.5 per cent.

The CBR is supposed to be the indicator of the cost of funds as the CBK uses it as the floor for lending to commercial banks but also as the ceiling when the regulator mops cash from the commercial banks.

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