commodities oil, fertilizer and wheat in particular, have risen sharply as a result of supply chain disruptions, adding to elevated inflationary pressures across the globe. “Financial market volatility has also increased amid adjustments in monetary policy in advanced economies,” it said.
Nevertheless, leading economic indicators point to a strong performance of the Kenyan economy, on the back of robust activity in construction, manufacturing, retail and wholesale trade, transport and storage and information and communication. “The economy is expected to remain resilient supported by recovery in agriculture and continued strong performance of the services sector despite the downside risks to global growth in 2022,” CBK governor Patrick Njoroge said.
Three surveys, the CEOs Survey, the Private Sector Market Perceptions Survey and the Survey of Hotels, which were conducted ahead of the MPC meeting on Tuesday, showed continued optimism on economic growth, business activity and employment in the East African nation for this year. The central bank noted that the banking sector also remains stable and resilient, with liquidity and capital adequacy ratios at a strong level. “The committee concluded that the current accommodative monetary policy stance remains appropriate, and therefore decided to retain the Central Bank Rate at 7 per cent,” Njoroge said.
