, NAIROBI, Kenya, Sept 13 – Foreign investors have expressed concern on Kenya regulating interest rates.
Central Bank of Kenya Governor Patrick Njoroge says a majority of investors would rather operate in an economy led by market-based policies instead of having the rates set by law.
“This macro policy issue has been brought up a couple of times. I have explained the hope that we may have to revert back to market-based policies which they prefer,” Dr. Njoroge said.
The governor was speaking on the sidelines of the third annual East Africa Investor conference in Nairobi.
The country’s macro stability is also another fear that investors face. According to Dr. Njoroge, investors are concerned about what the country is doing to minimize its vulnerability to external shocks, which in turn could increase its prospects for sustained growth.
Dr. Njoroge, however, says the markets have shown resilience as indicated by their performance post-August 8th general elections.
A year ago, the Banking Amendment Act was passed into law demanding that interest charged on loans be at no more than 4 percent above the CBR. This means that banks would charge a maximum of 14 percent interest annually on current and existing loans.