Next CBK Governor to face less pressure to start tightening cycle

It looks more likely than not that Dr. Haron Sirima will replace Prof. Njuguna Ndung’u as Governor of the Central Bank of Kenya, and his appointment is likely be welcomed by the markets as a safe pair of hands. The bigger picture, though, is that whoever is appointed will benefit from the plunge in oil prices, which means that there is less pressure to raise interest rates than there was just six months ago. We still expect interest rates to be increased, but the first hike is likely to come in early 2016, not this year.