Kenya inflation falls in April paving way for rate cut

NAIROBI (Reuters) - Kenya's year-on-year inflation dropped to 5.27 percent in April from 6.45 percent a month earlier, the statistics office said on Friday, a fall which analysts forecast could pave the way for an interest rate cut. The Kenya National Bureau of Statistics said in a statement that on a monthly basis, inflation was up 0.69 percent. The rate of inflation has been falling steadily this year, after peaking at 8.01 percent in December, and analysts said the latest reading might encourage policymakers to start easing rates. Razia Khan, head of research for Africa at Standard Chartered in London, said April's data opened "the way for the easing that we expect in Kenya". The central bank has held the benchmark lending rate at 11.5 percent since last August. Khan said food prices increased 1.5 percent in April from the previous month. "The clear standout inflation pressure is coming from food prices. This may have been a factor in the central bank wanting to proceed more cautiously with the start of an easing cycle any earlier," Khan said. (Reporting by Duncan Miriri; Editing by Giles Elgood)