NAIROBI, Nov. 23 (Xinhua) -- Kenya's economy is expected to grow by 5.1 percent in 2017 and to pick up strongly in the medium term supported by a stable macroeconomic environment, the country's apex bank said on Thursday.
The Central Bank of Kenya (CBK)'s top policy unit, the Monetary Policy Committee (MPC), said economic growth has remained resilient despite the effects of the drought experienced in the first half of the year and the prolonged elections in the second half of 2017.
"Growth has principally been supported by the services sector particularly the micro, small and medium enterprises (MSMEs)," CBK Governor Patrick Njoroge said in a statement issued after the review meeting in Nairobi.
Njoroge said the committee concluded that inflationary pressures in the economy were muted, and inflation was expected to continue to decline in the short term.
The MPC thus decided to retain the benchmark lending rate, the Central Bank Rate (CBR), at 10 percent as it continues to monitor the impact of the interest rate caps on the effective transmission of monetary policy.
"The CBK will continue to closely monitor developments in the global and domestic economy, and stands ready to take additional measures as necessary," Njoroge said.
The MPC Private Sector Market Perception Survey conducted in November shows that inflation was well anchored and is expected to decline in the short term.
According to the survey, respondents expected the exchange rate to remain stable supported by strong diaspora remittances and sufficient CBK foreign exchange reserves.
The survey also shows optimism in the economic prospects, with the conclusion of the elections, improved weather conditions, and continued public investment in infrastructure.
