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What the rain season will bring

06 March 2012, 18:01

Nairobi - Rainfall during Kenya's long rainy season starting this month is expected to be near-normal but poorly distributed, meteorologists said on Tuesday, presenting a mixed picture for the inflation outlook.

Kenya's inflation rate surged to nearly 20 percent last year on the back of rising food and energy prices, but eased to a lower-than-expected 16.69 percent in February, helped by falls in food and transport costs from a month earlier.

The rise in food prices was driven largely by drought at home, while low water levels at the hydropower dams that supply most of the east African country's electricity pushed up energy bills and led to costly fuel imports to run thermal generators.

The Kenya Meteorological Department said in its long rains (March-May) outlook that food growing areas of Western, Nyanza and Rift Valley would have near- or above-normal rain, and it advised farmers to take advantage of the favourable weather.

However, it said other food growing areas such as Central, Southeastern and Coastal Kenya would have near- or below-normal rains and that farmers should make best use of the rainfall available by planting appropriate crops.

It was a similarly mixed picture for hydropower generation. The Meteorological Department said the Turkwel and Sondu Miriu catchment areas would have near- to above-normal rainfall, leading to a significant improvement in water levels at dams.

However, normal to below-normal rains in the Tana River catchment areas were likely to lead to low inflows at major hydroelectric power generation dams in that area.

Analysts are watching weather forecasts in Kenya to gauge whether they are likely to have a positive or negative impact on inflation in the coming months, and hence the pace at which the country's central bank is likely to cut its key lending rate.

Kenya's central bank kept its key interest rate unchanged at 18 percent on Tuesday for a third month in a row.

The Meterological Department also said parts of country's Northeastern and Eastern provinces, which border Somalia and Ethiopia which are already drought prone, would receive highly depressed rainfall.

- Reuters

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