East African central banks raise interest rates on inflationary pressure

The Central Bank of Kenya in Nairobi.

The Central Bank of Kenya headquarters in Nairobi, Kenya. PHOTO | NMG

Photo credit: File | Nation Media Group

East African central banks are keen on anchoring inflation expectations to reduce the cost of living and attempt to comply with the elusive macroeconomic convergence conditions for a single currency regime.

These include a debt-to-gross domestic product (GDP) ratio of 50 percent, fiscal deficit (including grants) of three percent of the GDP, overall inflation of eight percent and forex reserves of 4.5 months of import cover.