The Central Bank of Kenya, in its latest economic projections shared on Thursday, June 25, offered much-needed hope as it showed a steadily improving trajectory following the Covid-19 pandemic.
CBK's Monetary Policy Committee (MPC), chaired by CBK governor Patrick Njoroge had convened to assess the outcomes of policy measures that have been deployed to mitigate the adverse economic effects of the Covid-19 pandemic.
In a statement, the committee highlighted that strong growth had been experienced in the first quarter of 2020 with the impact of the economy being most pronounced in April 2020.
Despite all the restrictions implemented due to the pandemic, Kenya's export goods improved by 4.1% between January and May 2020.
"Receipts from tea and horticulture exports increased by 15.2% and 22.7% respectively compared to May 2019." reads a section of the report.
MPC says the economic stimulus package is working well as a buffer and, which was used to justify maintaining the Central Bank Rate (CBR) at 7%
"The Committee noted that the package of policy measures deployed since March were having the intended effect on the economy, and will be augmented by the announced fiscal measures.
"The committee concluded that the current accommodative monetary policy stance remains appropriate, and therefore decided to retain the Central Bank Rate (CBR) at 7%," reads an excerpt from the statement signed by CBK Governor Patrick Njoroge.
The Monetary Policy Committee (MPC) - CBK’s organ responsible for the formulation of monetary policy - lowered the Central Bank Rate (CBR) to 7% on April 29, citing the need to augment its accommodative monetary policy stance as the key reason.
While this was a welcome move in catalysing demand through affordable credit, how effectively the decision has cascaded to the common mwananchi was what worries most Kenyans.
The repeal of section 33B of the Banking Act gave banks the leeway to choose how much more to charge its borrowers.
The latest economic projections also indicated an expected spike in economic activities over the next two months, as various governments ease up on measures that had been put in place to curb the spread of the coronavirus.
