2011-06-29

Banking Circular No 5 of 2011 - Further Tightening of Monetary Policy Stance Via Active Liquidity Management to Rein in Inflationary Expectations

On 29th June 2011, the Central Bank of Kenya (CBK) announced further tightening of monetary policy stance due to rising inflationary expectations. The primary focus is to maintain price stability and control inflation. The CBK Discount Window's operating rate will now be reviewed regularly and posted daily on their website at 9 am, starting with an initial accommodation of 8%. Additionally, the use of funds from the Overnight Window for interbank market trading or foreign exchange is prohibited, accompanied by severe penalties for non-compliance. These measures aim to curb fuel and maize prices as well as currency fluctuations that contribute to inflationary expectations.

Kenya

Central Bank of Kenya

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