NAIROBI (Reuters) -Kenya’s central bank held its benchmark lending rate at 7.5% on Wednesday to allow the hike it approved in May to transmit its way through the economy, the bank’s Monetary Policy Committee (MPC) said.
Policymakers raised the lending rate by 50 basis points at their last meeting in May, the first increase since July 2015, citing the risk of higher inflation from a surge in global prices of food and fuel.
Year-on-year consumer price inflation rose to 7.9% in June from 7.1% in the previous month, outside of the government’s preferred band of 2.5-7.5%.
The international prices of crude oil, wheat and edible oils have begun to moderate and that is expected to ease domestic inflationary pressures in the near term, the MPC said.
Inflation is expected to peak this year and then fall back into the government’s preferred range in early 2023, the International Monetary Fund said in a report published last week.
(Reporting by Duncan Miriri and George Obulutsa; editing by Alexander Winning and Mark Heinrich)
