Central Bank of Kenya maintains a lending rate at 7.00 percent

The Central Bank of Kenya has maintained its benchmark lending rate at 7.00 percent, noting the policy measures adopted in March and April to tackle the effects of the coronavirus were having the intended effect on the economy, and are still being transmitted, according to a news report by Capital FM.

Wednesday's decision follows a similar one made in April when the CBK's Monetary Policy Committee first lowered the lending rate to 7 percent. A month earlier, the rate had been lowered to 7.25 percent.

"The MPC concluded that the current accommodative monetary policy stance remains appropriate and therefore decided to retain the Central Bank rate at 7:00 percent," reads the MPC statement.

The committee however left the economy's growth forecast for the year at 2.3 percent. In contrast, leading indicators of the Kenyan economy point to relatively strong GDP growth in the first quarter of 2020.

"Nevertheless, growth is expected to weaken in the second quarter, due to the adverse impact of the containment measures, particularly in transport and storage, trade and accommodation and restaurants. As a result, real GDP growth in 2020 could slow to about 2.3 percent from 5.4 percent in 2019," MPC 's chair, Patrick Njoroge said.