Update: Kenya's rising inflation
29 November 2011, 12:49
Nairobi- Kenya's year-on-year inflation rate rose for the 13th month in a row in November to hit 19.72 percent, driven by higher food and energy costs, data showed on Tuesday.
Analysts expected a small rise in inflation in November, with a consensus forecast at 19.55 percent, according to a Reuters poll.
The Kenya National Bureau of Statistics said the consumer price index rose 1.52 percent in November from a month earlier, after a 1.57 percent month-on-month increase in October.
In an attempt to tame the runaway inflation, Central Bank of Kenya(CBK) has been sharply raising interest rates since the start of October and its benchmark rate now stands at 16.5 percent.
Another rate-setting monetary policy meeting is due on Thursday, with analysts expecting the central bank to leave rates unchanged. Analysts said the aggressive rises in interest rates had yet to be reflected in prices.
"As much as interest rates have gone up, in the long term it should tame inflation but it is a gradual process," Robert Gitobu, a trader at Bank of Africa, said.
A heavy rainy season is also expected to bring down the price of food in the next two months, Gitobu said.
"As much as it has started raining, we don't think we have reaped the gains yet. Food has a very big weight on that basket so as much as it is raining we are yet to see gains of that rain, maybe in December, January we might see the cost of food come down," he said.
The food and non-alcoholic drinks index went up by 1.35 percent between October and November, with price increases seen in beef, bread, potatoes, chicken, wheat flour and sugar.
Housing, water, electricity, gas and other fuel costs rose by 1.55 percent month-on-month.
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