East Africa’s central banks had a torrid time in 2011. The region’s worst drought in 60 years sent food prices soaring, while rising costs for fuel imports heaped pressure on local currencies.
Still, many monetary officials were blamed for exacerbating the crisis through their inaction. Some parliamentarians in Kenya recently called for their central bank governor to resign, saying his refusal to put up rates early in 2011 was part of the reason why inflation in the country rocketed from 6% to 20% between January and November and the shilling depreciated by more than 30% against the US dollar. Uganda’s record was even worse, with inflation climbing to more than 30% by October. In Tanzania and Burundi it rose to more than 15% by the end of the year.
