Monday, 03 September 2012 18:56
NAIROBI: Kenya's central bank is expected to drastically cut its interest rate at a meeting on Wednesday after inflation fell to a 19-month low in August, giving policymakers the confidence to take aggressive measures to jumpstart growth, a Reuters poll showed.
All nine analysts polled by Reuters expect the Central Bank of Kenya to cut its policy rate after year-on-year inflation fell for the ninth straight month in August to 6.09 percent, the lowest since January 2011, and a sharper fall than analysts' expectations.
Last year soaring inflation and volatile currencies in east Africa's three largest economies -- Kenya, Tanzania and Uganda -- forced policymakers to impose aggressive monetary tightening measures to reign them in.
Kenya's Monetary Policy Committee (MPC) ramped up the central bank rate by 11 percentage points in the last quarter of 2011 to 18 percent and held it there for seven consecutive months, before cutting it to 16.5 percent ...