Kenya inflation holds below target, rate cut possible next week

Published 31/01/2025, 09:22
Kenya inflation holds below target, rate cut possible next week

On Friday, Kenya’s inflation rate continued to stay below the central bank’s target range midpoint of 5% for the eighth consecutive month in January, signaling a potential for the central bank to reduce interest rates in the upcoming week.

According to the Kenya National Bureau of Statistics, consumer prices experienced a rise to 3.3% in January from 3% in December. This increase surpassed the median forecast of 2.8% predicted by three economists in a Bloomberg survey.

The data, released in a statement sent via email by the Nairobi-based bureau, suggests that inflation remains within manageable levels, giving the central bank leeway to adjust monetary policy to further support economic growth.

The consistent performance of the inflation rate below the target midpoint could be a key factor in the central bank’s decision-making process regarding interest rates. With inflation not posing an immediate threat to the economy, the central bank may have the flexibility to implement a rate cut.

The central bank’s next meeting to review interest rates is scheduled for next week.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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