All
 

 

Just in:  

You are here: Home»World»Business & Economy»Kenyan inflation rate slows

market2 copyNAIROBI: Kenya's year-on-year inflation fell for the 12th straight month in November, helped by falling fuel, transport and housing prices, and pointed to a possible further central bank rate cut in January.

 

Kenya and Uganda, east Africa's two main economies, have drawn interest from investors seeking higher yields but suffered from soaring inflation and weak currencies in 2011, causing policymakers to raise rates sharply to control the rot. The aggressive stance paid off.

 

Consumer prices in Kenya rose 0.65 percent in November but the year-on-year rate of inflation fell to 3.25 percent from 4.14 percent a month earlier.

 

A Reuters poll of 11 analysts had forecast a median fall to 3.95 percent, but the lower-than-expected fall pushed it to the lowest it has been since Aug. 2010.

 

Analysts say the slowing inflation rate provided more room for Kenya's central bank to cut its key lending rate, which stands at 11 percent after November's Monetary Policy Committee meeting.

 

"The low inflation rate gives the Central Bank of Kenya leeway for another rate cut at its upcoming meeting in January or possibly even if the Q3 GDP figures turn out to be weaker than expected," said Mark Bohlund, senior economist for sub-Saharan Africa at IHS Global Insight.

 

Policymakers have cut the central bank rate by a total 700 basis points since July to 11 percent, easing a tight monetary stance that saw them hold the rate at an ultra high 18 percent for five months to reigns in inflation and currency volatility.

 

Razia Khan, head of research for Africa at Standard Chartered Bank, said the inflation rate may fall further to below 3 percent due to the base effect.

 

"We expect the adoption of a cautious pace of easing from the CBK (Central Bank of Kenya), with rate cuts of 100 basis points in January and March. Whether we see more beyond that will depend very much on the elections, and how the Kenyan shilling fares," Khan said.

 

Kenya's election next will come under heavy scrutiny because it will be the first under a new constitution, and the first since the 2007 poll that gave rise to deadly fighting in which more than 1,200 people were killed in a country previously seen as a relative haven of peace in a troubled region.

 

Violence in Kenya could hit investment, trade and transport in its landlocked neighbours, especially Rwanda and Uganda, which rely on Mombasa port for imports of food, consumer goods and fuel.

 

Inflation in the region's biggest economy surged to 19.7 percent in November last year after the shilling slumped and the central bank dithered in its response to the currency crisis.

 

The Kenya National Bureau of Statistics said in a statement that diesel prices were down 4.7 percent compared with the same period a year ago, while the cost of petrol 6.8 percent lower, helping slow down the transport index to 0.59 percent over the twelve months from 2.80 percent in October.

 

Food and non-alcoholic beverage prices increased 1.74 percent year-on-year in November from 1.44 percent a month before.

 

Month-on-month, housing and utility costs as well as transport costs fell, while communication prices were flat.

 

In neighbouring Uganda, however, inflation rose for time first time in eight months in November, to 4.9 percent from 4.5 percent in October, but the spike was expected to be short-lived after the Christmas festivities.

 

The Bank of Uganda is expected to announce its latest decision on the benchmark Central Bank Rate (CBR) on Tuesday.

 

Copyright Reuters, 2012


 



 
Index Closing Chg%
Arrow DJIA 16,919.59 0.48
Arrow Nasdaq 4,527.52 0.43
Arrow S&P 1,981.60 0.50
Arrow FTSE 6,779.31 0.56
Arrow DAX 9,334.28 0.96
Arrow CAC-40 4,254.45 0.56
Arrow Nikkei 15,449.79 0.83
Arrow H.Seng 25,122.95 0.67
Arrow Sensex 26,420.67 0.11





where to buy

cheap wedding dresses

online - weddingdresstrend.com

Buy cheap Nike Mercurials cleats at mercurialscleats.com
cheap wedding dresses on SiteSteer.com - Best Online Wedding Store


Banking Review 2013


Buy direct from

China free shipping trade platform

Buy new style hair wigs at cheap price on Ishowigs.com

Annual2013/14
Foreign Debt $61.805bn
Per Cap Income $1,386
GDP Growth 4.14%
Average CPI 8.6%
MonthlyJune
Trade Balance $-2.311 bln
Exports $2.027 bln
Imports $4.338 bln
WeeklyAugust 15, 2014
Reserves $14.264 bln