(Bloomberg) -- Kenya’s annual inflation eased to a two-year low after the currency’s world-beating streak helped rein in import prices. 

Consumer prices rose 5.7% in March, compared with 6.3% the month before, the Kenya National Bureau of Statistics said Friday in an emailed statement. The median estimate of three economists in a Bloomberg survey was 6.1%. 

The shilling, which has depreciated against the dollar over the past four years, started reversing declines last month to make it the world’s best performing currency in 2024 among those tracked by Bloomberg. The currency has gained almost 19%, aided by a mix of factors, including a new eurobond issue and two successive interest-rate hikes in December and February of a combined 250 basis points.

The slowdown and continued rally in the shilling may persuade monetary policymakers to maintain the key rate at a near 12-year high of 13% when they meet April 3 with the aim of ensuring inflation eases to the 5% midpoint of its target range.

Other Insights:

• Prices increased 0.2% in the month.
• Prices of food and non-alcoholic drinks – which makes up a third of the inflation basket – rose 5.8% from 6.9% a month earlier.
• Heavy rains forecast for April may boost farm output and hydropower, which may help ease food and power prices.
• Government measures, including subsidies for fertilizer and seeds, along with affordable working capital for farmers are expected to support agricultural output, according to parliament’s budget office.
• Transport costs eased to 9.7% in March from 10.8% a month earlier after gasoline prices were cut 3.5%.
• Housing, water, electricity, gas and other fuel prices rose 8% from 8.4% in February.

--With assistance from Simbarashe Gumbo.

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