Nairobi, June 8 -- Banks and market analysts have differed on the CBK benchmark interest rate decision as calls to raise and hold the key rate emerge amid a jump in domestic inflation.

The Kenya Bankers Association (KBA) sees an increase in the benchmark rate as a decisive move to anchor inflation expectations while analysts mostly see a raise in the Central Bank Rate (CBR) as premature.

The rising domestic inflation rate, which topped 6.7 percent in May from 5.6 percent previously on the compounding effects of higher fuel prices is expected to influence the direction taken by the CBK monetary policy committee (MPC) on Tuesday.

KBA says inflationary pressures have re-emerged from the oil supply shock, raising the expectation for genera...