Kenya's February inflation eases on account of low oil prices

Kenya’s year-on-year inflation rate slowed to 6.84 percent in February, the statistics office said on Monday.

Data released by the Kenya National Bureau of Statistics shows food and other non alcoholic beverages decreased by 0.43 percent as a result of decreases in key food items that outweighed the increases such as potatoes, onions and tomatoes.

Housing, water, electricity, gas and other fuels also recorded a decline of 1.81 percent mainly contributed by a decline in prices of kerosene and cooking gas.

Electricity costs remained the same as January 2016.

Transport indices also decreased by 1.62 percent from the previous month due to a decrease in costs of petrol and diesel.

Alcoholic beverages, Tobacco and Narcotine however continued to remain costly due to higher excise taxes levied on beer and cigarettes as from December 2015.

Under the new excise charges, tax on beer went up to Sh100 per litre from Sh70 previously. Inflation rate was previously at 7.78 percent.

The Central Bank’s monetary policy committee retained the Central Bank Rate at 11.50 percent citing the need to continue anchoring inflation expectations.

CBK blamed December’s headline inflation, which surpassed the government’s upper-band target to reach 8.01 percent for the first time since 8.36 percent in August 2014, on cost of some food items that are seasonal and fast-growing.