NAIROBI, July 17 (Reuters) - Kenya’s central bank held its benchmark lending rate at 10.0 percent after inflation fell last month from a multi-year peak, the bank’s Monetary Policy Committee (MPC) said on Monday.
The consensus expectation in a Reuters poll of analysts was for a “hold” decision after inflation dropped from a five-year peak of 11.7 percent in May, to 9.21 percent last month, as food supplies improved due to rains following a months-long drought.
“Overall inflation is expected to continue to decline over the next few months, supported by lower food and fuel prices,” the bank’s Monetary Policy Committee (MPC) said in a statement.
It said the foreign exchange rate was “relatively” stable, even as the current account deficit widened to 6.2 percent of GDP in May from 6 percent in March, due to increased imports of cereals.
“The current account deficit is expected to narrow in the second half of 2017 in part due to resilient tea and horticulture exports, stronger diaspora remittances, and continued recovery in tourism,” the MPC said.
Private sector credit growth declined to 2.1 percent in the year to the end of May, the committee said. (Reporting by Duncan Miriri; Editing by Catherine Evans)