New lending rates to hit long-term projects, CMA warns

On Wednesday, President Uhuru Kenyatta assented to the Bill capping interest rates defying pressure from banks that had rooted for self-regulation. The law now bars lenders from increasing the rate above 4 percent of the Central Bank Benchmark Rate currently at 10.5 percent. PHOTO: COURTESY

The Capital Markets Authority has warned that uncertainty in interest rates could affect financing for long-term projects in the country.

Paul Muthaura, the CMA Chief Executive Officer said volatility or uncertainty could force banks to reduce financing for long-term projects. The capital markets regulator said it was keenly monitoring the effects of the new law even as Friday shares of Equity Bank and Kenya Commercial Bank tumbled by about 10 percent.