The Central Bank of Kenya (CBK) has warned that despite the global economy experiencing a slight easing in inflation rates in the past week, the new tariffs imposed by the United States on Wednesday last week are catalysts for raising inflation, supply chain disruption, and financial market volatility.
In its weekly bulletin, CBK noted that the country, like many others that have been hit with trade tariffs by the US, is likely to see volatility in the financial markets, which will affect the prices of stocks, bonds, commodities, and the Kenyan Shilling. Furthermore, CBK fears the 10 per cent trade tariff slapped on most countries is likely to push global inflation upwards, which will see the prices of imports also rise. "However, trade tensions escalated during the week following the announcement of new tariffs by the US administration on all US imports, raising concerns about inflation, supply chain disruptions, and financial market volatility," it stated.
The Central Bank of Kenya Photo KO Associates This comes as experts indicate that the CBK may cut borrowing costs for a fifth straight meeting on Tuesday, viewing the inflation rate as likely to remain below the 5 per cent midpoint of their target range in the near term.
According to a report this month by the Kenya National Bureau of Statistics (KNBS), the country experienced its fourth consecutive inflation increase this year, which now stands at 3.6 percent.
