Kenya stands to benefit from Trump’s robust drilling plans, Central Bank says

(Bloomberg) – U.S. President Donald Trump’s pledge to unlock more of that country’s vast stores of energy will likely lower Kenya’s consumer price growth, according to the chief of the African nation’s central bank.

Kenya will analyze the impact of Trump’s promise to “‘drill, baby, drill,’” Governor Kamau Thugge told reporters while commenting on the domestic price-growth outlook. “If it results in lower fuel prices, then it’s also possible that that will contribute to lower inflation in the US and also lower global inflation. And that could actually be a positive for us.”

The newly minted U.S. president signaled a push for domestic oil and gas production that may boost the nation’s output and ultimately lower prices. Brent crude slipped below $80 a barrel in London.

While Kenya announced an oil discovery in 2012, progress toward commercial production has stagnated and the nation imports all the 5.5 million cubic meters of petroleum products it consumes.

Kenya’s inflation is susceptible to the vagaries of weather at home and volatility of commodity prices abroad. The rate of price growth has declined and last year touched a 14-year low of 2.7%. It could climb to about 3.3% by March, according to the central bank.

Thugge said the monetary policy committee would gauge the effect of Trump’s new policies on inflation and in turn the Federal Reserve’s response.

“That also has an impact on us because of the potential of capital now flowing back to the US as interest rates would remain more elevated than our earlier expectations,” he said.