NAIROBI, Jan. 27 (Xinhua) -- The Central Bank of Kenya (CBK) on Wednesday retained its benchmark lending rate at 7.0 percent amid post-COVID-19 economic recovery.
Patrick Njoroge, CBK governor, who chaired the Monetary Policy Committee (MPC) meeting in Nairobi said that the package of policy measures implemented since March 2020 was having the intended effect on the economy, and are being augmented by the implementation of a number of fiscal measures in the 2020-21 financial year.
"The MPC concluded that the current accommodative monetary policy stance remains appropriate, and therefore decided to retain the Central Bank Rate (CBR) at 7.00 percent," Njoroge said in a statement.
Njoroge added that the committee met against a backdrop of the continuing global COVID-19 pandemic and the measures taken by authorities around the world to contain its spread and impact, and the positive prospects from the available vaccines.
"The MPC assessed the outcomes of its policy measures deployed since March 2020 to mitigate the adverse economic effects and financial disruptions from the pandemic," he noted.
He added that the MPC will continue to closely monitor the impact of the policy measures so far, as well as developments in the global and domestic economy, and stands ready to take additional measures as necessary.
The apex bank said that the global economy is now estimated to have contracted by 3.5 percent in 2020, but is expected to grow by 5.5 percent in 2021.
"This outlook is supported by the ongoing global rollout of COVID-19 vaccination programs and additional policy measures particularly in the U.S. However, the outlook remains highly uncertain, partly due to the emergence of new variants of the virus and the reintroduction of containment measures in some economies," the governor added.
He revealed that the leading indicators for the economy point to a recovery particularly in the fourth quarter of 2020, from the disruptions earlier in the year.
"This recovery is supported largely by strong performance in the agriculture and construction sectors, resilient exports, and continued recovery in manufacturing and services," Njoroge noted.
According to the apex bank, the economy is expected to rebound strongly in 2021, supported by recovery in the services sectors particularly education, manufacturing, resilient agriculture and the ongoing policy support through the government's economic recovery plan.
Njoroge revealed that exports of goods have rebounded, growing by 3.3 percent last year compared to 2019 while receipts from tea exports rose by 10.1 percent in 2020, largely reflecting increased output.
"The volume of horticulture exports also rebounded, growing by 27.7 percent in 2020 compared to 2019, with the resumption of demand in the international markets and the availability of adequate cargo space," he added.
The governor observed that the recovery in the volume of flower exports from the sharp contraction in April has been sustained, growing by 37.9 percent in December 2020 compared to December 2019.
Central bank data indicated that imports of goods declined by 12.5 percent in 2020 compared to 2019, mainly reflecting lower imports of oil products due to relatively low international oil prices.
"Receipts from services exports remained subdued, reflecting weaknesses in international travel and transport," Njoroge said. Enditem
