Kenya Central Bank Raises Key Interest Rate to Tame Inflation

By George Mwangi

Special to Dow Jones Newswires

NAIROBI--Kenya's central bank on Wednesday raised its key interest rate in order to tame inflation pressures.

The central bank increased its key lending rate by 50 basis points to 8.75% from 8.25%, it said in its monetary policy committee policy statement.

"The committee noted the sustained inflationary pressures, the elevated global risks and their potential impact on the domestic economy and concluded that there was scope for a further tightening of the monetary policy in order to anchor inflation expectations," the bank said.

Kenya's inflation rate accelerated to 9.6% in October from 9.2 % in September driven by higher food and fuel prices, it said.

Food inflation rose to 15.8 % in October from 15.5% in September, largely due to prices of corn and milk following reduced supply attributed to depressed rains, and edible oils and wheat products due to the impact of international supply-chain disruptions, it said.

Fuel inflation increased to 12.6% in October from 11.7% in September, mainly due to scaling down of the fuel subsidy, increases in electricity prices due to higher tariffs, and increases in transport costs, it said.

The committee will meet again in January, but remains ready to reconvene earlier if necessary, the bank said.

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(END) Dow Jones Newswires

11-23-22 1021ET