Govt to adopt inflation targeting to sharpen monetary policy
25 April 2014, 13:14
Nairobi - The government will start targeting inflation to make its monetary policy more predictable and efficient, the Treasury cabinet secretary Henry Rotich said on Thursday.
The country allows itself a margin of 2.5 percentage points on either side of a targeted medium-term inflation rate of 5 percent.
Rotich said discussions had been held on moving towards targeting using a fixed inflation rate. Doing so would allow policymakers to tailor the policy more closely to meeting the desired rate, the minister said.
Year-on-year inflation was 6.27 percent in March, within the 2.5-7.5 percent range the government is comfortable with. It had surged close to 20 percent by the end of 2011. Ultra-tight policy has since pulled it down.
Rotich said Kenya was in the final preparatory stages of its debut Eurobond, of up to $2 billion, with an announcement on the roadshow expected in about a week's time.