Central Bank of Kenya (CBK) has cut its key lending rate. This follow’s CBK’s Monetary Policy Committee (MPC) decision to cut the Central Bank’s benchmark lending rate by 100 basis points to 10.5 per cent.
The cut sets in motion efforts that could see the cost of loans in the country fall. Incidences of loan defaulters have been on the rise, with many banks reporting a high percentage of bad loans. Over the past 10 ten months, the Central Bank Rate has touched a high of 11.5 per cent mark.
“CBK will continue to monitor developments in the economy and will use instruments at its disposal to maintain overall price and financial sector stability,” said CBK Governor Paul Njoroge. Currently, borrowers ave been getting loans at costly rates of up to 28 per cent, a sharp rise in contrast to the 8.5 per cent CBR rate which was revised in July 2015.