Kenya’s central bank surprised financial markets by raising borrowing costs to an almost five-year high because of sustained inflationary pressures. Bonds gained.
The monetary policy committee increased its benchmark rate to 9.5% from 8.75%, Governor Patrick Njoroge, who presided over his second last MPC meeting before his term ends in June, said in a statement Wednesday. That was more than the median estimate of six economists in a Bloomberg survey, who forecast a 25 basis-point increase. It was the fourth hike since last year.