Kenya Inflation Rises for Third Month to More Than One-Year High
Kenyan inflation accelerated in August to a more than one-year high, reducing the central bank’s scope to cut interest rates.
The rate climbed for a third straight month to 6.7 percent on an annual basis from 6 percent in July, the Nairobi-based Kenya National Bureau of Statistics said in an e-mailed statement today. The median forecast in a Bloomberg survey of five analysts and economists was 6.8 percent. Prices in the month rose 0.3 percent, the statistics bureau said.
Policy makers at the Central Bank of Kenya next convene Sept. 3 to set the key lending rate, which was left unchanged at 8.5 percent at the last meeting in July to fend off price pressures. The government forecasts 2013 economic growth will accelerate to 5.8 percent from 4.6 percent last year and President Uhuru Kenyatta has pledged to double the annual rate to 10 percent and lift 10 million people from poverty by 2017.
Petrol costs were increased by 2.5 percent in the capital, Nairobi, this month as the shilling depreciated, putting pressure on inflation. The currency has weakened 0.2 percent against the dollar so far this month, taking its decline this year to 1.7 percent, according to data compiled by Bloomberg. The currency was trading less than 0.1 percent stronger at 87.55 per dollar by 5:56 p.m. in Nairobi.
The government targets 5 percent inflation, plus or minus 2.5 percentage points.
The price of housing, water, electricity, gas and other fuels rose 1 percent on a monthly basis, while food increased 0.1 percent, according to the statistics bureau.
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