23 July 2021

Interest Rate

The CBE maintained the interest rate at 3.75 per cent.

Inflation

Headline inflation increased to 3.9 per cent in June 2021 from 3.6 per cent in May 2021. Inflation remains moderate.

What does this mean?

Banks are expected to maintain the prime lending rate on loans extended to individuals and businesses at 7.25 per cent until the next monetary policy meeting.

What to expect

The Bank expects the cost of goods and services to continue increasing moderately over the year 2021 with inflation forecasted to average 3.92 per cent in 2021 (from 3.88 per cent forecasted in May 2021).

Economic Activity

Economic activity, as measured by the Quarterly Gross Domestic Product is estimated to have increased by 9.0 per cent, on a year-on-year and seasonally adjusted basis, in the first quarter of 2021 rising from 3.3 per cent recorded in the previous quarter.

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