The Monetary Policy Committee (MPC) which met in Nairobi said inflation expectations remained at well anchored within the target range, and the economy was operating close to its potential.
The MPC concluded that the policy stance remains appropriate, and that it will continue to monitor any perverse response to its previous decisions, CBK announced in a statement issued in Nairobi.
The meeting was held against a backdrop of domestic macroeconomic stability; increased optimism on the economic growth prospects; lower international oil prices; and increased uncertainties and a weaker global growth outlook.
The MPC Private Sector Market Perception Survey conducted in January 2019 indicated that inflation expectations were well anchored within the target range, with respondents revising their inflation expectations for the near term downwards on account of expected lower prices of food, fuel and electricity.
The survey also revealed increased optimism that economic growth would be stronger in 2019 due to, among other factors, a better investment climate; continued infrastructure development; and implementation of the Big 4 agenda that includes food security, affordable housing, manufacturing, and universal healthcare.