CAPE TOWN – Kenya’s central bank held its benchmark lending rate at 9.0 percent on Monday, saying inflation was well anchored within the government’s preferred range and that the economy was operating close to its potential.
Policymakers have held the benchmark rate for seven straight meetings but they said that stance could change soon.
“The Committee also noted the prospective tightening of fiscal policy which would provide scope for accommodative monetary policy in the near term,” it said in a statement.
The finance ministry has started cutting non-essential spending to reduce the fiscal deficit from close to 6 percent of GDP although analysts have expressed worry over the pace and depth of those cuts.
Year-on-year inflation dropped to 5.0 percent in August from 6.27 percent a month earlier, helped by falling food prices, data from the statistics office showed.