Central Bank of Kenya exerts pressure on banks to cut lending rates

The Central Bank of Kenya’s decision to maintain the central bank rate and lower a key figure used by banks to determine interest rates is a calculated move to tackle inflation, the local unit and cost of credit in the short to medium term.

Economists, bankers and investment analysts who spoke to Weekend Business said the Monetary Policy Committee (MPC) —the body that advises CBK on inflation, exchange rate and cost of credit—is keen on lower interest rates and single digit inflation of below 5 per cent.