IMF Issues Fresh Instructions to CBK Affecting Bank Interest Rates
The move is expected to impact commercial bank lending rates because changes in the central bank rate typically influence the cost of borrowing for businesses and households...
✨ Key Highlights
The International Monetary Fund (IMF) has updated the Central Bank of Kenya (CBK)'s economic model to incorporate climate shocks and government spending into interest rate decisions.
- The new model is deemed "far superior" to the old one in forecasting inflation, economic growth, exchange rates, and climate-related risks.
- Key organizations involved are the IMF and the Central Bank of Kenya.
- This update aims to help the CBK better manage inflation, with a target of 5 per cent, and improve the accuracy of monetary policy decisions.
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IMF Issues Fresh Instructions to CBK Affecting Bank Interest Rates - June 2026
The International Monetary Fund (IMF) has updated the Central Bank of Kenya (CBK)'s economic model to incorporate climate shocks and government spending into interest rate decisions. Kenya has secured a Ksh22.1 billion (JPY 25 billion) Samurai Bond from Japan, aimed at boosting local manufacturing and industrial growth. President William Ruto has directed an immediate salary increase for all civil servants, effective July. The adjustments will encompass basic pay and key allowances, including housing and commuter allowances.
