Kenya’s inflation had gone up to 4.5% year-on-year in August from 4.1% the previous month, and it was mainly due to the increase in food and transport prices, the Kenya National Bureau of Statistics stated. The statistics office made the announcement on Friday, demonstrating that the monthly rate of inflation was 0.3% in August as opposed to 0.1% the previous month.
Though the rate of August had gone up from that of July, it still remained within the target range. The central bank aims at keeping inflation within the range of 2.5% to 7.5% in the medium term.
Kenya’s central bank in early August decided to lower its benchmark rate by 25 basis points to 9.50%. The bank announced that due to inflation staying within the target range, there was space for more monetary policy relaxation.
Moreover, in August, the increase in food and transport costs made the consumer prices to go up. This is a clear indication that even though inflation is on the rise, the guidelines set by the central bank still allow it to happen without causing any discomfort.
Kenya’s central bank officials are prepared to change the interest rate as necessary based on inflation trends and state of the economy. The current inflation level is such that if economic conditions allowed, there would still be room for more monetary policy adjustments to be made.
