By George Obulutsa
NAIROBI (Reuters) -Kenya’s central bank lowered its benchmark lending rate by 25 basis points on Tuesday, saying there was room to ease monetary policy further as inflation remains well within target.
The Central Bank of Kenya (CBK) cut its policy rate to 9.50% from 9.75% previously, the seventh cut in a row.
The decision was in line with the median forecast in a Reuters poll of economists.
“The (Monetary Policy) Committee … concluded that there was scope for a further easing of the monetary policy stance to augment the previous policy actions aimed at stimulating lending by banks to the private sector,” the CBK said in a statement.
Consumer inflation rose to 4.1% year-on-year in July, compared with 3.8% the previous month, but it remains well within the central bank’s preferred 2.5% to 7.5% band.
Though price pressures have been contained, the East African country’s public finances have been under pressure because of heavy debt repayments and revenue underperformance.
The CBK left its economic growth forecasts for this year and next unchanged, at 5.2% and 5.4%, respectively.
It also maintained its projection for this year’s current account deficit, estimating it at 1.5% of gross domestic product (GDP) compared to 1.3% of GDP last year.
(Reporting by George Obulutsa;Editing by Alexander Winning and Gareth Jones)
