Close Menu
  • Briefing
    • Cover Story
    • Latest News
    • Counties
  • Politics
    • Society
  • Special Reports
    • Companies
    • Enterprise
    • Money
    • Technology
  • Columns
  • Dispatches from China
  • Member Content
    • Shop
  • Contact Us
    • About us
Facebook X (Twitter) Instagram
Facebook X (Twitter) Instagram LinkedIn
Nairobi Business Monthly
Subscribe
  • Briefing
    • Cover Story
    • Latest News
    • Counties
  • Politics
    • Society
  • Special Reports
    • Companies
    • Enterprise
    • Money
    • Technology
  • Columns
  • Dispatches from China
  • Member Content
    • Shop
  • Contact Us
    • About us
Nairobi Business Monthly
Home»Briefing»CBK reduces central base rate to spur growth
Briefing

CBK reduces central base rate to spur growth

NBM CORRESPONDENTBy NBM CORRESPONDENT5th April 2018Updated:23rd September 2019No Comments2 Mins Read
Facebook Twitter WhatsApp Telegram Email
Share
Facebook Twitter WhatsApp Telegram Email

Kenyans will now be able to access loans at lower interest rates after the Central Bank of Kenya Monetary Policy Committee (MPC) reduced the Central bank rate (CBR) from 10% to 9.5% for the first time since September 2016.

This was the lowest level the CBR has come down to since May 2015. According to the MPC, the decision to reduce the CBR to 9.5% is accredited to several factors. With the inflation expectations still being well anchored within the government target range and there being an increased optimism for growth prospects in the economy, the economic output was still below its potential level. Therefore, despite noting the risk of perverse outcomes, the MPC concluded that there was scope for easing the monetary policy stance in order to support economic activity leading to the reduction of the CBR.

“The MPC will closely monitor the impact of this change in its policy stance. Other developments in the domestic and global economy will also be observed, and the MPC stands ready to take additional measures as necessary,” said Governor of the Central Bank of Kenya, Dr Patrick Njoroge who chairs the committee.

The Nairobi Law Monthly September Edition

With the reduction in place, the maximum interest rate chargeable by banks will reduce from 14% to 13.5% in line with the interest cap rate. As according to the law, which was passed in September 2016, banks are not allowed to charge more than 4% of the CBR.

Kenyans have however been starved of credit since interest rates were capped as banks have resulted in loan access restrictions especially for small and medium enterprises as a result.

Kenya has been under pressure to amend the law for a while now. International Monetary Fund (IMF) has since placed the repeal as one of its conditions to Kenya if is to continue accessing the Sh150 billion precautionary loan that was recently extended for 6 months. 

The Nairobi Law Monthly September Edition
Follow on Facebook Follow on X (Twitter) Follow on WhatsApp
Share. Facebook Twitter WhatsApp Telegram
NBM CORRESPONDENT

Related Posts

Kenyan startups join Google’s AI accelerator amid Gen Z social commerce boom

30th June 2025

Kenya goes hi-tech to cut waste and funds misappropriation

30th June 2025

Plan unveiled to shield Kenyans from financial risks

26th June 2025

CAK bans exclusive ISP deals in housing estates

24th June 2025
Add A Comment

Leave A Reply Cancel Reply

The Nairobi Law Monthly September Edition
Latest Posts

Equity Group secures shareholder nod for UAE office and Sh16 billion dividend payout

30th June 2025

Court orders Stanbic Bank to pay Sh25m over 1-day bond error in KPA tender

30th June 2025

KEBS eases import rules for specialized vehicles

30th June 2025

Kenyan startups join Google’s AI accelerator amid Gen Z social commerce boom

30th June 2025

Social media takes over as top shopping hub for Gen Z in Kenya

30th June 2025
The Nairobi Law Monthly September Edition
Nairobi Business Monthly
Facebook X (Twitter) Instagram LinkedIn
  • About Us
  • Member Content
  • Download Magazine
  • Contact Us
  • Privacy policy
© 2025 NairobiBusinessMonthly. Designed by Okii

Type above and press Enter to search. Press Esc to cancel.