NAIROBI, Aug. 6 -- The Central Bank of Kenya (CBK) on Tuesday reduced its benchmark lending rate to 12.75 percent from 13 percent amid declining inflation.

Kamau Thugge, CBK governor who chaired the Monetary Policy Committee (MPC) meeting, noted that its previous measures have lowered overall inflation to the mid-point of the target range, stabilized the exchange rate, and anchored inflationary expectations.

"Kenya's overall inflation declined to 4.3 percent in July 2024 from 4.6 percent in June, thereby remaining below the mid-point of the target range," Thugge said in a statement released in Nairobi, Kenya's capital.

According to Thugge, the MPC met against a backdrop of an improved global outlook for growth, easing inflation in advanced economies, and persistent geopolitical tensions.

Thugge observed that non-food-non-fuel inflation has moderated, while central banks in some major economies have lowered interest rates in response to the easing inflationary pressures, with indications that other central banks will soon embark on a similar trajectory.

The apex bank said that there was scope for a gradual easing of the monetary policy stance while ensuring continued exchange rate stability.

The MPC added that it will closely monitor the impact of the policy measures as well as developments in the global and domestic economy and stands ready to take further action as necessary in line with its mandate.

  - Xinhua