Table 1.
Summary data description.
| Variable | Abbreviation | Measurement unit/proxy | Expected sign | Data source |
|---|---|---|---|---|
| Inflation | INF | Monthly CPI% | CBK | |
| Exchange rate depreciation | EXR | A percentage change in the value of Kenya shilling against US dollar % | Positive on inflation and monetary policy rate | CBK |
| Inflation gap | INFG | The percentage difference between monthly CPI and target inflation rate | Positive on monetary policy rate | CBK |
| Monetary policy rate | MPR | Monthly CBK rate | Negative on inflation | CEIC database |
| Broad money supply | M2 | Monthly percentage change in broad money supply | Positive on inflation | KNBS |
| Global oil price | GOP | Monthly Percentage change in crude oil price per barrel in US dollars | Positive on inflation | indexmundi.com database |
Note: CBK, KNBS, CEIC denotes Central Bank of Kenya, National Bureau of Statistics and China Economic Information Center respectively.