NAIROBI, Kenya, June 11 – The Central Bank of Kenya (CBK) expects commercial banks to continue lowering their lending rates following its decision on Tuesday to cut the Central Bank Rate (CBR) by 25 basis points, bringing it down from 10 percent to 9.75 percent.
CBK Governor Kamau Thugge said the move reflects the regulator’s commitment to easing monetary policy and stimulating economic growth through sustained credit flow to the private sector.
“The lending rates by commercial banks have been one of our concerns. As the Central Bank, we have eased monetary policy quite significantly over the last few months, starting from August,” said Thugge.
“We expect with this further reduction in CBR that commercial banks will continue to lower their lending rates.”
Thugge noted that commercial banks had started adjusting their lending rates, with a steady decline from a high of 17.2 percent in November last year to 15 percent in May.
He expressed optimism that the latest rate cut would drive further reductions.
The CBK’s monetary policy easing is anchored on the goal of boosting economic activity by encouraging borrowing and investment.
The regulator maintained that the decision was taken with a balanced view to support growth while keeping inflation expectations in check and ensuring exchange rate stability.
According to CBK, the rate cut is a strategic move to unlock credit for businesses and households and to support the economy amid global economic uncertainties and domestic pressures.
