NAIROBI, Kenya, July 10 – NCBA Bank has increased its base lending rate to 13 percent after the Central Bank of Kenya (CBK) late last month hiked base rate to contain inflation.
The lender says it will increase lending rate from 10.5 percent currently from August 7.
An increase in lending rate means that customers will have to pay more for loans, coming at a time when a majority of them are slowly recovering from impacts of election and Covid-19 lockdown measures.
The lender becomes the second financial institution to increase its rate after Equity Bank increased its.
CBK’s Monetary Policy Committee (MPC) last month increased the base lending rate to 10.5 percent from 9.5 percent in May.
The decision came amid high inflation that rose to 8 percent in May from 7.9 percent, according to the Kenya National Bureau of Statistics (KNBS).
High inflationary pressure was exerted by a rise in the cost of food and non-food alcoholic beverages at 10.2 percent as well as housing, water, electricity, gas, and other fuels at 9 percent.
“The Committee noted the sustained inflationary pressure, the increased risks to the inflation outlook, the elevated global risks, and their potential impact on the domestic economy,” CBK Governor Kamau Thugge said in a statement.
“The MPC thus concluded that there was scope for further tightening of the monetary policy to anchor inflation expectations,” Thugge added.
