Kenyan President Uhuru Kenyatta appointed Patrick Ngugi Njoroge as the ninth governor of the country’s central bank.
Jairus Mohammed Nyaoga was appointed as chairman, and Sheila M’Mbijjewe as second deputy governor, according to a statement posted on the website of the Nairobi-based Central Bank of Kenya. They will each serve a four-year term that started June 19.
Njoroge, 54, replaces Njuguna Ndung’u, who stepped down March 3 after serving two four-year terms. Njoroge said before a parliamentary vetting panel on June 16 that he would target lower inflation to help reduce commercial-bank lending rates in East Africa’s biggest economy.
The central bank’s Monetary Policy Committee raised the benchmark interest rate by more than analysts expected to 10 percent on June 9, the first rise in 3 1/2 years. Policy makers increased the basic rate from 8.5 percent, the level at which it had been since May 2013, after the Kenyan shilling dropped to its lowest level against the U.S. dollar since 2011.
Njoroge told lawmakers that the cost of commercial-bank loans is “very high” and may be linked to uncertain expectations about inflation.
“Managing inflation will be a priority because when it’s uncertain which direction inflation will take, banks feel they have to charge high interest rates,” he said. “We can lower inflation even further. We need to go further.”
The inflation rate fell to 6.9 percent in May from 7.1 percent in April, near the upper limit of the government’s target of 2.5 percent to 7.5 percent.
Previously an adviser to a deputy managing director at the International Monetary Fund, Njoroge has a PhD in economics from Yale University and previously served in Kenya’s finance and planning ministries.
The central bank announced in a separate statement that the Monetary Policy Committee will hold its next meeting July 7 to review the benchmark interest rate.