Kenya’s inflation rises to 6.8% in September

East Africa's largest economy, Kenya, has recorded a monthly inflation rate of 6.8% in September, marking a positive trend in the fight against rising inflation despite economic headwinds. Kaneja Amani, a Trader from Standard Bank Group, joined CNBC Africa to analyze the current economic situation in the region. Amani highlighted that the inflation numbers in East Africa, including Uganda at 2.7% and Kenya at 6.8%, are well-contained compared to some West African countries experiencing inflation rates above 20%. He commended East Africa's proactive approach post-pandemic and the impact of controlled oil prices on inflation. However, Amani cautioned that as oil prices and base effects unwind, there may be a slight uptick in inflation, but it is expected to remain within central bank expectations. The recent decision by the Central Bank of Kenya to maintain the benchmark lending rate at 10.5% reflects efforts to regulate inflation within the target band. Amani suggested that central banks across the region may need to tighten their stance further in response to external factors like US yields and FX fluctuations. Shifting focus to the Stanbic PMI index, Amani noted a divergence in the region with Uganda showing growth supported by employment numbers while Kenya experienced a decline due to currency devaluation affecting production. He expressed optimism that stabilizing FX rates could boost Kenya's PMI. Amani emphasized the role of the Central Bank of Kenya in creating a conducive economic environment amidst challenges like non-performing loans and rising interest rates. Regarding Kenya's upcoming Eurobond maturity next year, Amani reassured that the country is likely to meet its obligations, citing efforts to bolster reserves and market confidence. Recent rallies in Eurobond yields indicate market acceptance of Kenya's commitment to fulfilling its financial responsibilities.