Interest Rate Hikes and Agriculture

Kenya’s monetary policy is in a fix, once again. The MPC committee decided to hike rates by a surprising 550 basis points, from 11% to 16.5%. and the cash reserve ratio (CRR) by 50 basis points to 5.25 percent points. This is after raising the CBR by another 400 basis just one month ago. The CBK governor said that they did this as a measure to curb inflation and foreign exchange volatility. As @Alykhansatchu put it, “This was essentially a quid pro quo for the $250m IMF top up”. We are essentially over-reliant on the west for donor support and debt and it is hurting our economy significantly. Continue reading