Kenya holds rate at 8.75% as Iran war raises inflation risks
Kenya’s central bank kept its benchmark interest rate at 8.75 percent for a third consecutive meeting as it weighs rising fuel costs, a stable shilling and stronger economic growth against the risk of renewed inflation from the Iran war.
The Central Bank of Kenya’s Monetary Policy Committee said the current policy stance remains appropriate to keep inflation expectations anchored and support exchange-rate stability. Annual inflation rose slightly to 6.5 percent in July from 6.4 percent in June, remaining within the bank’s target range of 2.5 to 7.5 percent.
Why it matters: Kenya’s decision shows the challenge facing African central banks as higher oil prices threaten to push up transport, food and production costs. Holding rates allows the bank to support economic activity while it assesses whether the energy shock will translate into broader inflation.
Namibia keeps rate at 6.75% despite rising inflation risks
The Bank of Namibia left its repo rate unchanged at 6.75 percent, citing subdued economic growth, a relatively benign inflation outlook and adequate foreign-exchange reserves.
The rate has remained at this level since June, when the central bank raised it by 25 basis points. Annual inflation accelerated to 4.4 percent in June from 4.1 percent in May, its highest level in almost two years.
Nedbank analysts expect inflation to rise above 5 percent in August after the government reinstated some fuel taxes that had been suspended to cushion consumers from the impact of the Iran war. The central bank projects inflation at 4 percent in 2026 and 3.9 percent in 2027.
Why it matters: Namibia is balancing weak growth against the risk that higher fuel costs could push inflation above its current forecasts. A sustained increase in energy prices could limit the central bank’s ability to cut rates and provide more support to the economy.
Uganda holds rate at 9.75% as oil pressure remains contained
The Bank of Uganda kept its key lending rate at 9.75 percent for an eighth consecutive policy meeting, saying higher oil prices have not so far generated broader price pressures across the economy.
Headline inflation rose to 4 percent in July from 3.7 percent in June, while the central bank continues to target core inflation of 5 percent over the medium term.
Governor Michael Atingi-Ego said current inflation data does not show wider price pressures spreading through the economy because of higher oil prices. The economy is expected to grow by 7 to 7.5 percent in the fiscal year that began in July, up from an estimated 6.4 percent in the previous fiscal year.
Why it matters: Uganda’s decision reflects stronger confidence that the economy can absorb the oil-price shock without a broad inflation surge. If price pressures remain contained and growth strengthens, the central bank could have more room to maintain its current stance rather than tightening policy.
