NAIROBI, Kenya, Aug 12 – The Central Bank of Kenya (CBK) has lowered its base lending rate by 25 basis points to 9.5 percent, citing stable inflation, a recovering economy, and growth in private sector lending.
The Monetary Policy Committee (MPC) said the decision, made at its August 12 meeting, was also supported by adequate foreign exchange reserves, sufficient to cover 4.8 months of imports, a stable banking sector, and a narrowing current account deficit.
“The MPC decided to lower the Central Bank Rate (CBR) by 25 basis points to 9.50 percent from 9.75 percent,” CBK said in a statement.
The rate cut comes as banks begin reducing their lending rates in line with CBK guidance.
Last month, Diamond Trust Bank Kenya Limited lowered its interest rate on shilling-denominated loans from 14.41 percent to 14.21 percent per annum.
Analysts expect the move to reduce borrowing costs, stimulate economic activity, and support credit growth in the banking sector.
