CBK upbeat on vaccine lift to Kenya  economy amid curbs

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Economy

CBK upbeat on vaccine lift to Kenya  economy amid curbs


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Dr Patrick Njoroge, Central Bank of Kenya governor. FILE PHOTO | NMG

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Summary

  • The rollout of Covid-19 vaccines and a quick success of the new lockdown hold the key to Kenya’s economic recovery this year, the Central Bank of Kenya said Monday.
  • CBK Governor Patrick Njoroge said without giving figures that the economy rebounded in the three months to December, and quarter one of this year, adding that inoculation plans and new curbs would influence growth.

The rollout of Covid-19 vaccines and a quick success of the new lockdown hold the key to Kenya’s economic recovery this year, the Central Bank of Kenya said Monday.

CBK Governor Patrick Njoroge said without giving figures that the economy rebounded in the three months to December, and quarter one of this year, adding that inoculation plans and new curbs would influence growth.

Kenya last Friday introduce a new round of curbs, including restricted travel in Nairobi and four other counties, longer curfew hours and the closure of bars, as Covid-19 infections hit record levels.

The country on March 5 began vaccinations, targeting 1.25 million persons by June and another 9.6 million in the next phase starting July.

“The economy is expected to rebound strongly in 2021, supported by recovery in the services sector particularly education and the wholesale and retail trade,” said Dr Njoroge following a Monetary Policy (MPC) meeting.

“This recovery will be anchored on the success of the containment measures and the vaccination programme, including the measures announced on March 26.”

The economic recovery that started in the fourth quarter of last year has been supported by agriculture, real estate and the financial sectors.

The restrictions have raised fears of a second wave of job losses and pay cuts across sectors in an economy that dipped into recession in the third quarter of last year at the height of the Covid-19 crisis.

The CBK shrugged of fears and held its benchmark lending rate at 7.0 percent on Wednesday, saying that the measures it had put in place since March had helped mitigate Covid-19’s effect on the economy.

Like other central banks worldwide, the CBK put in place a range of easing measures at the start of the coronavirus pandemic in March and April to try to contain damage to the economy.

It is the seventh straight time the bank has held its rate.

Since March, the bank has cut the benchmark lending rate by a total of 125 basis points, slashed cash reserve requirements for commercial banks and allowed them to restructure distressed loans.



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