World’s best currency helps slow Kenya’s inflation to 2-year low

KENYA’S annual inflation eased to a two-year low after the currency’s world-beating streak helped rein in import prices. 

Consumer prices rose 5.7 per cent in March, compared with 6.3 per cent the month before, the Kenya National Bureau of Statistics said Friday (Mar 29) in an emailed statement. The median estimate of three economists in a Bloomberg survey was 6.1 per cent. 

The shilling, which has depreciated against the dollar over the past four years, started reversing declines last month to make it the world’s best-performing currency in 2024 among those tracked by Bloomberg. 

The currency has gained almost 19 per cent, aided by a mix of factors, including a new eurobond issue and two successive interest-rate hikes in December and February of a combined 250 basis points.

The slowdown and continued rally in the shilling may persuade monetary policymakers to maintain the key rate at a near 12-year high of 13 per cent when they meet Apr 3 with the aim of ensuring inflation eases to the 5 per cent midpoint of its target range. BLOOMBERG