NAIROBI, Kenya- In a move aimed at spurring economic growth, the Central Bank of Kenya (CBK) has lowered the Central Bank Rate (CBR) from 10.00pc to 9.75pc.
The 25-basis-point reduction, announced Tuesday, is part of a broader strategy to ease monetary policy and boost private sector credit.
CBK Governor Kamau Thugge underscored the regulator’s concern about the high cost of borrowing and emphasized the expected ripple effect on commercial lending rates.
“The lending rates by commercial banks have been one of our concerns. As the Central Bank, we have eased monetary policy quite significantly over the last few months, starting from August,” said Thugge.
“We expect with this further reduction in CBR that commercial banks will continue to lower their lending rates.”
Thugge noted a downward trend in commercial lending rates, which dropped from 17.2% in November 2023 to 15% by May 2024.
He expressed confidence that the latest cut would encourage further reductions, easing access to credit for both consumers and businesses.
The central bank described the move as a deliberate attempt to inject momentum into the economy at a time when global uncertainty and domestic pressures are weighing heavily on business and household confidence.
