Low rates key to reducing cost of doing business

Kenya: It is a universally accepted principle that interest rates play a major role in the performance of an economy.

In general, higher interest rates result in reduced borrowing and hence reduced spending by both households and businesses. Conversely, lower interest rates normally lead to increased spending. We use the term normally as the near-zero interest rates introduced in most parts of the EU and the US did not lead to the desired increased spending.