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Kenyan central bank cuts key lending rate to 8.25%

Kenya Central Bank Governor Patrick Njoroge addresses a news conference at the Central Bank of Kenya (CBK) headquarters in Nairobi, Kenya July 25, 2019. REUTERS/Stringer

NAIROBI (Reuters) – Kenya’s central bank monetary policy committee cut its benchmark lending rate to 8.25% on Monday from 8.50%, saying the economy was operating below potential and there was room for a more accommodative monetary policy.

The bank cut the benchmark rate in November by 50 basis points, the first cut after holding it for seven straight meetings.

“The Committee … noted that there was room for further accommodative monetary policy to support economic activity. The MPC therefore decided to lower the CBR to 8.25 percent,” the bank said in a statement.

In a Reuters poll of eight economic analysts last week, all expected the rate to be held steady.

Governor Patrick Njoroge told Reuters in November that the scrapping of an interest rate cap, in place since 2016, had removed one of the concerns the central bank had about cutting the lending rate.

Reporting by George Obulutsa and Omar Mohammed; Editing by Kevin Liffey

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