CBK Governor maintains inflation ought to be fought valiantly

As the curtains draw at the IMF-World Bank spring meetings in Washington D.C, CNBC International caught up with Kenya’s Central Bank Governor for a conversation on inflation, financial stability, and how recent volatility in U.S. and European banks have had knock-on effects. The Governor highlighted the importance of vigilantly fighting inflation and emphasized the critical role of financial stability in the global economy. Recent events in the U.S. and European banking sectors have raised concerns about potential impacts on global financial stability. The collapse of several banks, including Credit Suisse, served as a wake-up call for regulators and central bankers worldwide. The Governor stressed the need for swift action to address vulnerabilities in the financial system and prevent widespread economic damage. He noted the challenges faced by emerging market economies, such as Kenya, in dealing with the aftermath of the banking crisis. The sudden surge in dollar liquidity and flight to safety have affected markets, leading to increased yields for frontier economies. While the situation is expected to stabilize over time, the short-term consequences have been significant. Central bankers and regulators must remain vigilant to safeguard financial stability and prevent future crises.