NAIROBI, March 29 (Xinhua) -- The Central Bank of Kenya (CBK) on Wednesday raised its benchmark lending rate to 9.5 percent from 8.75 percent amid increasing inflation.
CBK Governor Patrick Njoroge, who chaired the Monetary Policy Committee (MPC) meeting in Nairobi, the capital of Kenya, said that food inflation has been on the increase mainly due to a surge in the prices of vegetables, attributed to hot and dry weather conditions.
"Overall inflation is expected to remain elevated in the near term, partly reflecting further increases in electricity prices," Njoroge said in a statement.
The MPC 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 CBK's monetary policy body met against a backdrop of continued global uncertainties, a weak global growth outlook, geopolitical tensions and measures taken by authorities around the world in response to these developments.
It also reviewed the outcomes of its previous decisions and measures implemented to mitigate the adverse economic impact and financial disruptions.