Kenya’s inflation rose to 10.28 percent year-on-year in March, its highest level since May 2012, pushed by higher food prices, the statistics office said on Friday.
The rate first rose outside of the government’s preferred band of 2.5-7.5 percent last month, after food prices surged due to a drought, which has left about 2.7 million people in need of food aid.
Month-on-month inflation edged down to 1.67 percent in March from 1.72 percent in February, the statistics office said in a statement.
Policymakers held the benchmark lending rate at 10.0 percent this week saying they expected inflation to fall in line after two months.
“Unless there is a pronounced secondary price effect to food price inflation, or a hint of FX instability, there is not sufficient justification for the central bank to react to this spike,” said Razia Khan, head of research for Africa at Standard Chartered in London.
Khan, however, said the headline inflation had climbed faster than the market had expected, pointing to a potential slowdown for the Kenyan economy.
“Risks will have to be carefully gauged going forward,” she said.