The International Monetary Fund. (AFP/File, Saul Loeb)

Kenya is under pressure to adopt an inflation management system favoured by the International Monetary Fund (IMF), which Uganda started using late last year.

Inflation-targeting entails publicly pronouncing a goal that all government units set out to achieve, including importing adequate quantities of food and stockpiling fuel reserves, to mitigate impact of adverse changes in prices.

In the latest IMF agreements with authorities, the government reportedly promised to gradually move towards the inflation targeting method although no firm dates are stated. Kenya is using an inflation management method, which does not strictly adhere to any particular target.

Uganda experienced high inflation rates exceeding 30 per cent towards the end of last year but has since managed to bring this down after the country’s central bank adopted a tight monetary policy stance that sought to mop up excess cash in the money market.



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