By George Obulutsa
NAIROBI (Reuters) -Kenya’s central bank cut its benchmark lending rate for the eighth meeting in a row on Tuesday, saying there was room to ease monetary policy further as inflation remains well within its target range.
The decision takes the Central Bank of Kenya’s policy rate to 9.25% from 9.50% previously.
The bank’s Monetary Policy Committee (MPC) said the 25 basis-point rate cut would bolster previous moves to stimulate lending by banks to the private sector and support economic activity, while ensuring inflationary expectations remain well anchored.
“The MPC will closely monitor the impact of this policy decision as well as developments in the global and domestic economy and stands ready to take further action as necessary in line with its mandate,” the committee said in a statement.
Consumer inflation stood at 4.6% year-on-year in September, up slightly from 4.5% the previous month but comfortably inside the 2.5%-7.5% target band.
The central bank slightly raised its economic growth forecast for next year to 5.5% from a 5.4% projection given in August, but it kept unchanged its 2025 growth prediction of 5.2%.
“The growth of the economy is expected to pick up … supported by continued resilience of key service sectors and agriculture, and continued recovery of the industry sector,” its statement said.
The central bank now sees this year’s current account deficit at 1.7% of gross domestic product, compared with a deficit of 1.5% of GDP seen previously.
East Africa’s biggest economy has been grappling with a hefty debt burden, but it has been trying to manage refinancing risks with bond buybacks and other tactics.
(Reporting by George Obulutsa; Editing by Alexander Winning and Hugh Lawson)
