This archive report was first published on 26 November 2019.
On November 25, 2019, the Central Bank of Kenya's Monetary Policy Committee (MPC), led by Governor Patrick Njoroge, made a crucial decision to lower the benchmark lending rate from 9% to 8.5%.
This move aims to ease access to credit and stimulate economic growth, which is currently performing below its potential.
According to the MPC, inflation expectations remain well-anchored within the target range, and the economy is operating below its potential level.
The Committee noted that there is room for accommodative monetary policy to support economic activity and decided to lower the Central Bank Rate (CBR) to 8.50% from 9.00%.
As a result, banks are expected to slash their lending rates, encouraging the uptake of loans and benefiting small and medium-sized enterprises (SMEs) and individuals.
However, since the repeal of the interest rate cap in October 2019, banks have yet to review their borrowing rates, but stakeholders are optimistic that it is only a matter of time before lending rates go down.
