Kenya interest rates

When it comes to interest rates, Kenya is hard to predict. Having cut interest rates from 18 per cent in mid-2012 in great chunks of 150, 200 and 350 basis points to 9.5 per cent, Tuesday’s central bank rate decision was something of a guessing game.

In the end, the bank cut by another 100bp to 8.5 per cent, having held at its previous meeting in March. Around half the analysts polled in advance by Reuters and Bloomberg had predicted a hold in rates. At least no-one was predicting a rise. Read more

Could there be a bigger show of bravado? While observers worry that Kenya’s economy could go awry come the March presidential elections, the monetary policy committee is feeling good.

For the fourth time in a row, it gave a vote of confidence to Kenya’s economy by lowering the central bank rate, this time taking it down 150 basis points to 9.50 per cent. This time last year it was 18 per cent. And not only did it lower the rate, but the 150bp reduction beat analyst predictions of 100bp. Read more

When it cuts it really cuts. Kenya’s central bank has reduced its benchmark interest rate by 200 basis points to 11 per cent, after inflation fell below the bank’s target in October and exchange rates remained stable. Read more

Scissors - making the cutNot for Kenya these small 25 basis point interest rate cuts. On Wednesday, the central bank cut its rate by a whopping 350bp from 16.5 per cent to 13 per cent, following an earlier 150bp cut back in July.

The main reason is inflation, which has fallen from nearly 20 per cent at the end of 2011 to single digits, with August’s year on year number coming in at 6.1 per cent from 7.7 per cent in July. So are we done yet? Read more

Kenya hiked its policy interest rate by 150bps to 18 per cent a year on Thursday as it intensified its fight against inflation, which hit 19.7 per cent in November. This is the central bank’s fourth consecutive interest rate increase and brings this year’s cumulative increase to a whopping 1100bps. Read more

As bond yields across Europe climb ever higher, one frontier African economy has managed to get a $409m bond issue away at a yield 150 basis points less than it paid a month ago.

Of course, Nigeria still had to offer an eyewatering yield of 16.5 per cent but any improvement on the even more painful 18 per cent it payed in October is welcome – particularly for an economy that is struggling with inflation, low growth and a high interest rate which is posing a dilemma oft repeated in the region. Read more

Kenya’s central bank shocked markets on Tuesday by raising its benchmark policy rate 550 basis points to an eyewatering 16.5 per cent. The central bank’s monetary policy committee, led by Njuguna Ndung’u, vowed to continue tightening monetary policy to fight inflation and further rate hikes cannot be ruled out.

Kenya’s rate hike followed Uganda’s 3oobp interest rate increase to 23 per cent earlier in the day, as both countries struggle to contain rampant inflation driven by soaring food and fuel costs. Kenya’s central bank also raised its cash reserve ratio by 50bp to 5.25 per cent. Read more

At last. After nine months of weak-willed interest rate rises and even the odd misplaced reduction, Kenya’s central bank has finally hiked base rates by a figure worth writing home about: 400 basis points.

The move takes base rates to 11 per cent and is a belated effort to rescue the shilling, which has the dubious honour of world’s worst performing currency this year, having falling about 30 per cent. Last week, it fell beyond 100 shillings to the dollar, a painful psychological threshold, to an all-time low of 104.15. Read more