Connect with us

Hi, what are you looking for?



CBK cuts lending rates to 8.5pc to spur economic activity

The CBK Headquarters on Haille Sellasie Avenue in Nairobi. /CFM-FILE.

NAIROBI, Kenya, Nov 26 – The Central bank of Kenya has cut the benchmark lending rate by 50 basis points to 8.5 percent, saying the move is expected to spur economic activity in the country.

The Monetary Policy Committee had held the rate at 9.0 percent for seven consecutive times since end of July 2018 before Monday’s cut.

“The Committee noted the ongoing tightening of fiscal policy and concluded there was room for accommodative monetary policy to support economic activity,” a statement from CBK said.

This comes a few weeks after the removal of the lending rates cap, which CBK said had led to significant rationing of credit, particularly to the most vulnerable.

The inflation rate stood at 4.9 percent in October compared to 3.8 percent in September, which the statistics office said was reflecting temporary effects of increases in the prices of maize grain and sifted flour.

At the same time, private sector credit grew by 6.6 percent in the 12 months to October, compared to 7.0 percent in September.

According to CBK, strong growth in credit to the private sector was observed in trade (8.5 percent); finance and insurance (15.1 percent); consumer durables (28.6 percent); and private households (6.9 percent).

Growth in private sector credit particularly to Micro, Small and Medium-sized Enterprises (MSMEs) is expected to increase due to the deployment of innovative credit products targeting the sector, and the repeal of interest rate caps.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...