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The Central Bank of Kenya (CBK) has retained its benchmark interest rates at 11.5 percent after inflation figures crossed its target rate of 7.5 percent in December.

In a statement released on Wednesday, the Governor of the CBK, Patrick Njoroge, said the Monetary Policy Committee decided to hold interest rates to maintain price stability while ensuring stability in the financial sector.

“The Committee concluded that the current inflation pressures are temporary, and that the monetary policy measures currently in place are containing any demand pressures in the economy,” Njoroge said.

In December, month-on-month inflation rose to 8 percent, from 7.3 percent in November. This figure is above the upper limit of the CBK’s inflation target rate, which is 7.5 percent.

The increase was driven largely by a spike in the prices of food items such as Irish potatoes, tomatoes, cabbages, etc, which contributed 2.3 percentage points to overall inflation and 6.3 percentage points to food inflation in December.

“Many of these items are seasonal and fast-growing, and their impact on inflation is expected to dissipate by April,” Njoroge said.

Kenya, which exports mainly agricultural products such as tea, coffee, sisal etc., has been hit hard by the slump in global commodity prices, not unlike other commodity exporting countries. Yet, the CBK estimates that the economy grew by 5.8 percent in the third quarter of 2015 compared with 5.2 percent in Q3 of 2014.

Foreign reserves currently stand at about $7.02 billion, equivalent to 4.5 months of import cover.

“Stability in the foreign exchange market continues to be supported by a narrowing current account deficit largely due to a lower import bill for petroleum products, recovery in tourism, tea and horticulture exports, and diaspora remittances,” the CBK statement said.

Chibuike Oguh is Financial Nigeria's Frontier Markets Analyst