Kenya central bank holds main lending rate at 10.0 pct

Kenya’s central bank held its benchmark lending rate at 10.0 percent on Monday, saying inflation was within its preferred range and there was increased optimism about the outlook for economic growth.
A Reuters poll of 10 analysts had expected policymakers to hold the benchmark rate.
The bank’s Monetary Policy Committee (MPC) said there was room for “accommodative monetary policy in the near term”.
The government capped commercial lending rates at four percentage points above the central bank rate in 2016.
“The MPC continues to monitor the impact of the interest rate caps on the effective transmission of monetary policy,” the committee said in a statement.
Inflation stood at 4.5 percent last month, firmly within the government’s preferred band of 2.5-7.5 percent. Private sector credit grew by 2.4 percent in the year to December, the MPC said.
It added that the current account deficit was estimated at 6.2 percent of GDP last year, and it was likely to drop to 5.4 percent this year due to lower food imports.