Nairobi, July 19 -- The interest rate on the one-year Treasury bill has climbed above nine percent for the first time in five months on fears of higher inflation after the US and Iran renewed hostilities last week.

The Central Bank of Kenya (CBK) had successfully kept the 364-day rate below 9 percent for the past month, but it relented in the Thursday auction, agreeing to pay 9.04 percent for the one-year debt from 8.99 percent in the previous sale.

Analysts had expected interest rates to start coming down after the US and Iran agreed an interim 60-day ceasefire last month.

However, the agreement has all but collapsed, with the two countries trading retaliatory airstrikes in the past week and once again closing the key Strait of Hormuz...