Inflation rate for the month of August jumped up to 8.36% from 7.67%. Inflation has been on an upward trajectory in the past 6 months a trend that could get the monetary policy makers worried. The next move could be formulation and execution of a counters strategy to curb the inflation rate from going beyond the set economically accommodative limits.
The Monetary Policy Committee (MPC) in its last sitting maintained the central bank rate (CBR) at 8.5%. This happened despite the rise in inflation figures in the month of August.
The shilling is exchanging against the dollar at levels above ksh. 88 per dollar and has maintained above that level in the past weeks. Analysts believe that due to the end month demand for the dollar to make payments for imports and the long-term infrastructure projects in the country; the shilling will remain in the ksh. 88 – ksh. 90 range within the next few weeks or months.
The NSE 20 share index has maintained above the 5000 point in the past weeks and it hit its all-time high of 5163 points on Tuesday this week. This is being buoyed by the aggressive participation of foreign investors on the blue chip counters and their increasing interest in other less vibrant stocks.
The Kenya Bankers Reference Rate (KBRR) maintained at 9.13% with most banks adding a premium of between 3% – 6% to it in arriving at their final lending rates in the past month. A discussion on reducing the cost of credit is ongoing within the banking sector and we hope to get good feedback ultimately.