The Central Bank of Kenya has defied market speculations to retain the bench mark rate at 10.5 per cent.

This means that the cost of borrowing will remain same till November when the CBK's monetary committee meets. 

Analysts had projected the monetary committee of the apex bank to hike the guiding rate by at least 100 basis points in an effort to stem second round effects of inflation. 

The Africa Development Bank (AfDB ) has projected the cost of living to average 8.6 per cent this year, 1.1 per cent higher than the country's ceiling of 7.5 per cent. 

The Monetary Policy Committee (MPC) noted that inflation is expected to remain within the target range, supported by lower food prices with the expected improved supply.

Additionally, it observed that NFNF inflation was expected to decline, indicative of easing underlying inflationary pressures.

Committee further assessed that the impact of the tightening of monetary policy in June 2023 to anchor inflationary expectations was still transmitting in the economy.

"In view of these developments, the MPC decided to retain the Central Bank Rate (CBR) at 10.50 per cent,'' the CBK statement read.