Quotes from Standard Chartered:
-The Central Bank of Kenya (CBK) will announce its monetary policy decision on 26 February. We expect it to keep the central bank rate on hold at 8.5%. Disinflation has become more pronounced in recent months as lower oil prices and higher geothermal electricity production lower fuel and utility costs. Food-price inflation has also moderated.
-We expect CPI inflation to fall below 5% in Q2-2015, and possibly below 4% by Q3, before rebounding. This effect is likely to be short-lived, however,arguing against rate cuts now.
-A higher domestic borrowing requirement will support market interest rates, and while the authorities may be tempted to offset this with policy easing, FX risks argue for no change to the policy rate. With the current CBK governor's term soon ending, there will be little appetite for big policy moves just yet.
