MPC set to meet July 29 as country reopens

Wednesday, July 8th, 2020 00:00 |
Central Bank of Kenya. Photo/PD/File

Steve Umidha @UmidhaSteve

Central Bank’s Monetary Policy Committee (MPC) will hold its next rate-setting meeting on July 29, the banking regulator said yesterday.

This comes after the president announced phased reopening of Kenya’s economy after three months under curfew and economic lockdown.

At its last meeting in June, the bank left its benchmark lending rate unchanged for the second time in two months at 7 per cent, and is likely to be upheld.

CBK’s Governor Patrick Njoroge, who chairs the Monetary Policy Committee (MPC) meetings said policy measures deployed since March to mitigate the adverse economic effects and financial disruptions had necessitated the move.

“The MPC will continue to closely monitor the impact of the policy measures so far, as well as developments in the global and domestic economy, and stand ready to take additional measures as necessary” Njoroge said in the last meeting.

Economic disruptions

The global economic outlook has deteriorated further since the Covid-19 outbreak with the gross domestic product (GDP) across advanced economies expected to contract more sharply in the second quarter than had been projected in April, following severe disruptions to trade and supply chains and the collapse in global travel.

Kenya’s economic growth was last month expected to decline to a lower 1.8 per cent from previous projection of 2.5 per cent this year, compared with 5.4 per cent growth seen last year as key sectors of the economy continued to feel the pandemic shocks.

These numbers could however change following Monday’s decision by President Uhuru Kenyatta for a phased reopening of the country, lifting restrictions on travel in and out of the capital Nairobi. Uhuru also allowed gradual resumption of air travel.

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