The expectation that the MPC would continue to lower interest rates aggressively in December was probably based on the incorrect assumption that monetary policy decisions are based on current inflation. At that time, CPIX inflation was within the target and was still trending downwards.
These economies, Kenya included, have become more integrated with the global economy, and are therefore exposed to external shocks largely through the linkages in the financial markets, foreign direct investment flows, as well as commodity prices. Growth in Sub-Saharan African (SSA) region has been held back in 2016 by the weak global economy, the decline in commodity prices, and uncertainty in the financial markets.