This archive report was first published on 26 June 2020.
On June 25, 2020, the Central Bank of Kenya (CBK) decided to retain the key lending rate at 7pc during its monetary policy committee meeting.
The decision was made in response to the positive economic outcomes from the mitigation measures deployed in March, which aimed to cushion the country against the economic impact of the COVID-19 pandemic.
According to the CBK, the banking sector remains stable, with strong liquidity and capital adequacy ratios. The gross non-performing loans (NPLs) ratio stood at 13pc in May, similar to the previous month.
The monetary policy committee also noted a significant rebound in exports in May and June, compared to the poor performance in April.
As a result of the emergency measures announced in mid-March, personal loans worth Sh199.1 billion had been restructured by May, providing relief to affected individuals and businesses.
The CBK also welcomed the extension of emergency measures, which had a positive impact on mobile money transactions and facilitated official and personal transfers to vulnerable households.
Additionally, the CBK applauded the economic stimulus announced by the Treasury CS during the Budget 2020/21, which targets key sectors of the economy, including agriculture, infrastructure development, and manufacturing.
“The Economic Stimulus Programme targets to support the growth of key sectors of the economy including agriculture and food security, infrastructure development, tourism, manufacturing, education, health, information and communications, and the MSMEs,” said Patrick Njoroge, the MPC chair.
