Kenya’s annual inflation rate accelerated to 7.9% in June from 7.1% in May, exceeding the ceiling of the central bank’s target range for the first time in almost five years. The breach of the central bank’s inflation target coupled with USD-denominated government loans trading at distressed levels pressures the bank to raise its interest rate quickly. In May, the central bank unexpectedly raised its interest rate for the first time in almost seven years by 50bps to 7.5%.