Kenya Central Bank governor Patrick Njoroge addresses a news conference in Nairobi, Kenya, July 25 2019. Picture: REUTERS
Kenya Central Bank governor Patrick Njoroge addresses a news conference in Nairobi, Kenya, July 25 2019. Picture: REUTERS

Nairobi —  Kenya's central bank held its benchmark lending rate at 7% on Wednesday, the bank's monetary policy committee said, adding that measures it had put in place since March had helped mitigate the effects of Covid-19 on the economy.

Like other central banks worldwide, Kenya's central bank put in place a range of easing measures at the start of the coronavirus pandemic in March and April 2020 to try to contain damage to the economy caused by the crisis.

It is the sixth straight time the bank has held its rate.

Since March, the bank has cut the benchmark lending rate by a total of 125 basis points, slashed cash reserve requirements for commercial banks and allowed them to restructure distressed loans.

The central bank said commercial banks have so far restructured 1.63-trillion Kenyan shillings ($14.81bn) in loans, equivalent to 54.2% of the total outstanding of 3-trillion shillings for the industry, assisting borrowers hit by the impact of the pandemic.

Similar to other economies worldwide, Kenya's tourism, education, transport and other key sectors have been hit hard by the Covid-19 pandemic.

The sectors have started to recover after the government lifted some restrictions it put in place to contain the coronavirus's spread, but they are yet to return to pre-pandemic levels.

The government forecasts the economy to grow 6.4% in 2021 from an estimated 0.6% 2020.

The central bank said it forecast the current account deficit to be 5.1% of GDP in 2021, from 4.8% in 2020. Its next meeting will be in March.

• Kenyan central bank governor Patrick Njoroge sent a note of congratulation to US treasury secretary Janet Yellen on her new post. The governor called Yellen a great economist and human being who is a trailblazer for central bankers and women in finance, reports said earlier on Wednesday.

Reuters 

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