Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
CBK Governor Dr. Patrick Njoroge/CFM

Kenya

CBK Maintains Benchmark Lending Rate at 7pc for Fourth Time in a Row

NAIROBI, Kenya, Sep 29The Central Bank of Kenya has maintained its benchmark lending rate at 7.00 percent fourth time in a row noting that the current accommodative monetary policy stance remains appropriate.

MPC through a statement on Tuesday said that the current accommodative monetary policy stance remains appropriate, and therefore decided to retain the Central Bank Rate (CBR) at 7.00 percent.

CBK first lowered the rate to 7 percent in April this year.

According to the bank regulator, the banking sector remains stable and resilient, with strong liquidity and capital adequacy ratios.

The ratio of gross non-performing loans (NPLs) to gross loans stood at 13.6 percent in August, compared to 13.1 percent in June.

NPL increases were noted in the real estate, personal and, transport, and communication sectors, due to a subdued business environment.

At the same time, CBK revealed that as a result of emergency measures it announced in mid-March to cushion Kenyans from the harsh economic environment occasioned by the coronavirus disease, personal loans worth amounting to Sh271 billion had been restructured.

Other sectors such as trade, manufacturing, real estate, and agriculture were offered relief of loans that amount to Sh849.9 billion.

In line with this, total loans amounting to Sh1.12 trillion have been restructured which represents 38 percent of the total banking sector loan book of Sh2.9 trillion by the end of August.

Advertisement. Scroll to continue reading.

Njoroge added that of the Sh35.2 billion that was released by the lowering of the Cash Reserve Ratio in March, Sh32.4 billion has been used to support lending, especially to the tourism, trade and transport and communication, real estate, and manufacturing sectors.

Private sector credit growth meanwhile in the 12 months to August, stood at 8.3 percent, supported by continued recovery in demand from the COVID-19 related disruptions and the accommodative monetary policy.

The Committee noted the continuing implementation of the fiscal policy measures announced in the FY2020/21 Budget, including the Economic Stimulus Programme, to stimulate the economy and cushion vulnerable citizens and businesses from the adverse effects of the pandemic.

The MPC added that it will continue to closely monitor the impact of the policy measures so far, as well as developments in the global and domestic economy, and stand ready to take additional measures as necessary.

Click to comment
Advertisement

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...

Headlines

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

Kenya

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

Coronavirus

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

Coronavirus

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