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Kenyan Central Bank retains benchmark rate at 9.0 percent

NAIROBI (Xinhua) -- The Central Bank of Kenya (CBK) on Monday maintained benchmark lending rate at 9.0 percent to help check inflation.

Patrick Njoroge, CBK governor, who chaired the Monetary Policy Committee meeting in Nairobi, said the apex bank will continue to closely monitor developments in the global and domestic economy, and stands ready to take additional measures as necessary.\

"The Committee noted that inflation expectations remained well anchored within the target range, but there is need to remain vigilant on possible spillovers of recent food and fuel price increases," Njoroge said in a statement issued in Nairobi.

Central Bank of Kenya Governor Patrick Njoroge | Coastweek


He said the monetary policy organ further noted that the economy was operating close to its potential, adding that the current policy stance remains appropriate.

The central bank will continue to monitor any perverse response to its previous decisions, Njoroge said.

Month-on-month overall inflation rate stood at 6.6 percent in April, compared to 4.4 percent in March, mainly reflecting increases in food prices attributed to depressed supply of vegetables and other fast-growing food crops following the delayed onset of the long rains, the bank said.

Food inflation rose to 7.7 percent in April, from 2.9 percent in March, but non-food-non-fuel inflation remained below 5 percent, indicating that demand pressures and the spillovers of the rise in food and fuel prices were muted.

"Overall inflation is expected to remain within the target range in the near term, largely due to expectations of lower food prices following improving weather conditions, and lower electricity prices with the reduced usage of expensive power sources," Njoroge said.

NAIROBI (Xinhua) -- Central Bank of Kenya Governor Patrick Njoroge addresses journalists in Nairobi. The Central Bank of Kenya (CBK) has maintained benchmark lending rate at 9.0 percent to help check inflation. XINHUA PHOTO - FRED MUTUNE

He said a timely release of maize stocks from the government grain reserve will support the stability of food prices.

Njoroge said the meeting was held against a backdrop of domestic macroeconomic stability, sustained optimism on the economic growth prospects, improving weather conditions in most parts of the country and increased uncertainties in the global financial markets.

He said the economy recovered strongly in 2018, with real gross domestic product (GDP) surging 6.3 percent, up from 4.9 percent in 2017.

This, the governor said, reflected a strong recovery in agriculture, manufacturing, and a buoyant services sector, particularly trade, information and communication, accommodation and restaurants, transport and storage, and finance and insurance.

"Leading indicators of economic activity show that growth remained resilient in the first quarter of 2019, despite the delayed onset of the long rains," he said.

The apex bank said growth in 2019 is expected to be supported by agricultural production, robust growth of small and medium-sized enterprises and the service sector, increased foreign direct investment, and a stable macroeconomic environment.

"Additionally, the continued alignment of government spending to the Big 4 priority sectors is expected to boost economic activity in manufacturing, agriculture, construction and real estate, and health sectors," Njoroge said.


Kenya floats U.S. $2.5 million dollars mobile bond

NAIROBI (Xinhua) -- Kenya on Monday put up for sale mobile bond worth 250 million shillings (about 2.5 million U.S. dollars) as the Treasury sought to build on the success of two previous securities.

The mobile bond, dubbed M-AKiba, was floated by the Treasury, the Central Depository and Settlement Corporation (CDSC), and the Nairobi Securities Exchange (NSE). It came barely two months since another one was sold, attracting a subscription of 79 percent.

"M-Akiba re-open 2 seeks to raise 2.5 million dollars and is scheduled to run from May 27 to June 7," the three institutions said in a statement on Monday.

CDSC chief executive Rose Mambo said since inception, the bond has attracted over 459,586 investors.

"The bond has raised a total of 5.95 million dollars since inception.

"In the March offer alone, we were able to raise 1.97 million dollars against a target of 2.5 million dollars," she said.

NSE chief executive Geoffrey Odundo said the growth of the mobile bond is a testament of its ability to enhance financial inclusion as ordinary Kenyans can buy the security through their phones.

Kenya to weed out tax evaders and improve cargo clearance

NAIROBI (Xinhua) -- Kenyan President Uhuru Kenyatta said Monday his government will vet and register all import and export cargo consolidators to weed out tax evaders.

Kenyatta who made the second impromptu visit to the Inland Container Depot (ICD) in Nairobi within a span of two days said only genuine consolidators gazetted after the vetting process will be allowed to work with the small scale traders in the import and export business to avoid delays in the clearance of containers at the ICD.

"There are people who engage in consolidation.

"They bring goods in containers, claiming they are transit goods while their real motive is to evade paying tax.

"That is not right and we will not allow it," he said in a statement issued after the visit.

Kenyatta who held a crisis meeting with stakeholders said the visits follow complaints by traders whose goods have been confiscated.

He assured small scale traders that their goods will be cleared on time once they adhere to the laid down procedures.

"Many times our traders operate without knowledge of the government procedures and we would like all boardroom decisions disseminated to the traders," President Kenyatta said.

Kenyatta, however warned importers that the government will not relent in its efforts to stem out the importation of counterfeit goods into the country.

He said counterfeits were a major hindrance to the development of local the manufacturing sector thereby denying millions of young Kenyans employment opportunities.

During his visit on Sunday, Kenyatta made an impromptu inspection visit of the ICD during which he called for an urgent stakeholders meeting which was held on Monday to resolve the cargo impasse at the facility.

During the meeting, it was established that the delay in the clearing and release of the close to 1,000 containers was largely due to insufficient paperwork including cargo that is destined for the local market but was declared as export goods by deceitful importers in attempts to evade paying requisite taxes.

The stakeholder meeting, which brought together all state and non-state agencies operating at the terminal, resolved to have the containers processed and released to the owners in the two to three weeks.

The meeting also agreed to institute reform measures that will reduce cargo clearance period at the depot to a maximum of four days.



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