To prevent sustained food inflation from becoming generalized inflation through higher wage increases, we have to reduce inflation in other items. Indeed, overall headline inflation may have stayed below 6 percent recently even in periods of high food inflation, precisely because other components of the CPI basket such as “clothing and footwear” are inflating more slowly.
As a result of this, we have retained the CBR at 11 percent and we will watch carefully the next few weeks to see where things move. Developments in the foreign exchange market The shilling has been depreciating against the US dollar over the last few weeks. Since February 2014, the shilling has depreciated by about 14 percent against the US dollar.