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cbkThe Monetary Policy Committee (MPC) has retained the Central Bank Rate at 11.5 percent. Central Bank Governor Dr. Patrick Njoroge, said they decided to keep the lending rate unchanged because the inflation rate had reduced from 7.03 in June to 6.6 percent in July.
Dr. Njoroge added that the lending rate was also retained because the measures taken in the previous meetings were yet to be fully transmitted to the economy.


MPC had increased the lending rate by 1.5 percent for two consecutive months-from 8.5 percent to 10 percent in June and then to 11.5 percent in July.
In a press statement, Dr. Njoroge said: “The foreign exchange market was volatile in early July 2015, but has stabilized reflecting in part the impact of monetary policy measures. In particular, open market operations and the sale of foreign exchange by the Central Bank of Kenya (CBK) have stemmed the volatility and resulted in tight liquidity conditions”.
He said the regulator will use the instruments at its disposal to maintain overall price stability. The shilling traded Sh101.1 against the dollar on Wednesday compared to Sh101.5 on Tuesday.
MPC noted that although the current deficit had widened mainly due to imports of capital goods and lower earnings from exports, it has nevertheless been tamed by strong diaspora remittances, adding that there is increased optimism for the economy.
The CBK’s Market Perceptions Survey of July 2015 showed optimism for increased foreign direct investment and recovery of key sectors of the economy such as agriculture and tourism.
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