*Today’s News Highlights* ▪ *Treasury, CBK split over rival exchange for bonds* The treasury has broken ranks with the central bank by supporting a new exchange for trading government securities that will rival the Nairobi Securities Exchange (NSE). The Treasury has backed the new privately-owned platform – the East African Bond Exchange (EABX)- which allows investors to trade Treasury bonds outside the Nairobi bourse. This places the Treasury and the Central Bank of Kenya (CBK) at odds since the banking regulator has raised concerns over the second bond trading platform. The banking regulator fears that the dual platform will distort the market through creation of two prices for the same bond. ▪ *Eyes on CBK for benchmark rate cut as core inflation falls to 2pc* Kenya's statistics office published core inflation data for the first time at two percent to help monetary authorities to better predict the impact of their interest rate decisions on the economy. The core inflation, where prices of food, fuel and transport are excluded, dipped from 2.2 percent in December 2024. The drop will provide room for the Central Bank to cut its benchmark lending rate further and signal commercial banks to lower lending rates to homes and businesses. The Central Bank of Kenya’s Monetary Policy Committee (MPC) meets Wednesday to set the rate on the back of lowering interest rate three times in a row. ▪ *Kenya Power to repay World Bank dollar loan in shillings* Kenya Power will repay the $300 million (Sh38.7 billion) at current exchange rates) on-lent loan from World Bank in shillings, in what offers the utility significant relief from the burden of servicing foreign-currency-denominated debt. The firm disclosed on Friday, that the National Treasury is now set to absorb any forex costs if the shilling weakens against the dollar by the time the loan repayment starts. World Bank approved the performance-based loan in 2023, where Kenya Power qualifies to draw billions of shillings in tranches upon hitting some parameters that are meant to boost the firm’s operations, and ultimately ensure it remains on the profitability path. ▪ *Relief for Kenyan households as January power prices drop 23.4pc* Households are enjoying a relief after electricity prices declined 23.4 percent in January compared to a corresponding month last year, on the back of strengthened local currency and lowered fuel prices. New data from the Kenya National Bureau of Statistics shows that consumers on average paid Sh5,705.92 for 200 kilowatt-hour (kWh) of electricity in January, marking a dip from the average of Sh7,447 incurred in January last year. This is a departure from an earlier trend in which power prices had surged amid concerns they were making the country uncompetitive in the battle for foreign investors. ▪ *Search for Kenya Airways strategic investor stalls* The search for a strategic investor in Kenya Airways has stalled after the government froze approval of a consultant to help identify the equity partner amid claims that the latter is reconsidering the turnaround plan. KQ, as the carrier is popularly known, planned to announce a strategic investor this year to support capitalisation of the company and boost its efforts to reduce debt and expand operations. Now, the State has delayed hiring the consultant as it looks at options of providing capital to the national carrier. The airline has been banking on its top shareholders to back the conversion of the loans to shares in fresh efforts to smooth the path for the entry of a strategic investor. _Courtesy: Business Daily_ https://whatsapp.com/channel/0029VaBcBIRAzNbtD1l1eA1k