• Current monetary policy measures containing demand pressures
  • Kenya Banks' Reference Rate retained at 9.87 percent

The Central Bank of Kenya left its main interest rate unchanged for the fourth consecutive meeting as declining oil prices herald decreasing inflation rates from a 17-month high.

The Monetary Policy Committee kept the rate at 11.5 percent, Governor Patrick Njoroge said in an e-mailed statement from the capital, Nairobi. The decision was forecast by 11 of 12 economists surveyed by Bloomberg, while one said policy makers would increase it by 100 basis points.

"The committee concluded that the current inflation pressures are temporary, and that the monetary policy measures currently in place are containing any demand pressures in the economy," according to the statement.

Inflation in East Africa’s largest economy breached the 7.5 percent upper limit of the government’s target when it hit 8 percent in December, a trend the National Treasury says is unlikely to continue.

“Inflation might well have peaked,” Aly-Khan Satchu, chief executive of Nairobi-based Rich Management, said in an e-mailed response to questions before the rate decision.

The Kenyan shilling was little changed in the past three months after its 11 percent slide against the dollar last year prompted the central bank to raise interest rates by 300 basis points.

"The shilling has been a powerful signal in the noise,” Satchu said. “In fact, on a trade-weighted basis the currency has been appreciating.”

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