The Central Financial institution of Kenya (CBK) has held its interest rate at 13%, signalling it’s transferring nearer to reducing borrowing prices as inflation eases and the Kenyan shilling strengthens in opposition to main world currencies.

On Wednesday, the apex financial institution famous that the headline inflation eased to five.7%, the bottom in two years, as the prices of most meals objects together with maize flour, wheat flour, kales, spinach, and cabbages dropped.

The CBK’s Financial Coverage Committee (MPC) exercised cautious optimism regardless of the shilling rallying in opposition to the greenback and inflation easing inside the regulator’s 2.5% to 7.5% vary.

“The MPC famous that its earlier measures have lowered inflation, addressed the trade price pressures, and anchored inflationary expectations. Due to this fact, the MPC concluded that the present financial stance will be certain that general inflation continues to say no in direction of the 5.0 per cent midpoint of the goal, and thus determined to retain the Central Financial institution Fee (CBR) at 13 per cent,” CBK stated in a press release on Wednesday.

The Kenyan shilling has rallied 18%, addressing inflation brought on by imports. The central financial institution on Wednesday quoted the shilling in opposition to the greenback at KES 131.48 from a file excessive of KES 160.18 in February–representing a 17.9% appreciation up to now month.

The CBK stated that main financial indicators level to “continued robust efficiency of the Kenyan economic system within the first quarter of 2024,” buoyed by agriculture, the service sector, and ICT.

The March 2024 Agriculture Sector Survey performed forward of the MPC assembly signifies that meals costs will fall within the subsequent three months supported by beneficial climate situations, stronger shilling, and dropping gas costs.