Kenya unveils an economic stimulus – COVID19

Kenya’s Monetary Policy Committee met on the 23/3/2020 to deliberate on ways to counter the economic impact caused by Corona Virus pandemic which has devastated countries with significant human, economic and social costs. According to MPC, the effects of the pandemic on the Kenyan economy was still evolving, but already evident that the impact will be severe. The MPC’s priority according to the statement was to minimise  the economic and financial impact on Kenya’s economy.

Given the circumstances, Kenya’s GDP growth forecast was cut to 3.4% from the earlier estimate of 6.2% . CBK confirmed that the country’s Foreign exchange reserve was adequate  at USD 82,51 which is equivalent to 5.1 months of import cover.  The banking sector remained stable and resilient , with liquidity  and capital adequacy rations at 51.1% and 18.7%  respectively. Commercial Banks gross Non performing loans for February was up by 12.7% from 12% in December.

The Monetary Policy Committee cut Central Bank Loans to 7.25% FROM 8.25% and cash reserve ratio was cut to 4.25% from 5.25%  releasing  Sh35.2bn additional liquidity.

SOURCE: mpc