The Central Bank of Kenya has raised the base lending rate for the second consecutive time.

In the review made on February 6, 2024, the CBK raised the base lending rate from 12.5 per cent to 13 per cent today. The new rates are now the highest rates since November 2012.

“The Monetary Policy Committee noted that overall inflation has remained sticky in the upper bound of the target range. The Committee further observed that all key components of inflation-fuel, food, and NFNF- had increased in January,” a statement from the CBK stated.

“In addition, the MPC noted the continued, albeit reduced, pressures on the exchange rate and therefore concluded that further action was needed to stabilise prices.”

The CBK noted that Kenya experienced an increase in inflation in the month if January.

Kenya’s overall inflation rose to 6.9 per cent in January 2024 from 6.6 per cent in December 2023. At the same time, food inflation in Kenya increased to 7.9 per cent in January 2024 from 7.7 per cent in December 2023.

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Fuel inflation in Kenya rose to 14.3 per cent in January 2024 from 13.7 per cent in December 2023. Non-food non-fuel inflation increased to 3.6 per cent in January 2024 from 3.4 per cent in December 2023.

“The proposed action will ensure that inflationary expectations remain anchored, while setting inflation on a firm downward path towards the 5.0 percent mid- point of the target range, as well as addressing residual pressures on the exchange rate,” the CBK stated.

“The MPC will closely monitor the impact of the policy measures as well as developments in the global and domestic economy and stands ready to take further action as necessary in line with its mandate. The Committee will meet again in April 2024.”