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Central Bank of Kenya’s Monetary Policy Committee has lowered the Central Bank Rate to 8.50 per cent from 9.00 per cent, despite the removal of interest rate capping in the country.

Why Kenya’s Central Bank has retained base lending rate at 9%

Kenya July 25, 2019

The Central Bank of Kenya (CBK) has retained its benchmark lending rate at 9.0 per cent for the sixth straight time since bringing it down in July 30 2018, sparing borrowers higher cost of loans.

The Monetary Policy Committee (MPC) which is CBK’s top decision making organ met on Wednesday to review the country’s macroeconomics.

Chaired by CBK governor Patrick Njoroge, the committee held retained the rates where there have been for almost a year, even as the capping of interest rates continues to affect lending trends by banks.

President Uhuru Kenyatta signed into law a Bill capping bank interest rates at 4 per cent above the Central Bank Benchmark Rate, in August 2016.

With the bench mark rate at 9.0 per cent, banks can only charge interest of up to 13 per cent.