Key questions:
  1. The Central Bank of Kenya left rates unchanged at its latest monetary policy committee meeting. What were the significant considerations leading up to this decision?
  2. How will this decision affect the Kenyan economy in the near term?


The Central Bank of Kenya held rates steady for the second consecutive month at 10.5% in its latest meeting on October 3, 2023.


Since 2022, when the global monetary policy tightening cycle began on the back of the Russia-Ukraine war, the CBK has raised rates five times by 350 basis points (bps) cumulatively. This is far lower than Sub-Saharan African peers like Nigeria (725 bps) and Ghana (1,550 bps) and advanced economies like the US (500 bps).


While this is largely a function of the uniqueness of each economy (inflation and macroeconomic stability), it still indicates that Kenya is playing catch-up in the new era of high global interest rates. And investors will keep prioritising securities in advanced and stable economies with better yields than emerging economies like Kenya.

However, of the twelve major economies in East Africa, Kenya has the second highest interest rate after Malawi (24%), followed by