Kenya to change monetary policy framework
Kenya’s Central
Bank said on Tuesday it would be revising its monetary policy targets
after signs that two years of monetary easing had lowered commercial
lending rates and increased loan volumes.
Central Bank of
Kenya governor, Njuguna Ndung’u, said that although the financial
sector was deepening, there was scope for banks to raise credit
further. The bank’s Monetary Policy Committee (MPC) cut its benchmark
lending rate by 300 basis points between late 2008 and July this year.
It has since left
the rate unchanged at 6 percent, saying growth is on track,
inflationary risk is minimal, and credit is growing.
“The market is
deepening very fast. Everybody is bringing back money into the market,
it is improving the transmission mechanism of monetary policy. We have
to revise our framework in line with that,” Mr. Ndung’u told a press
conference.
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