The Central Bank of Kenya (CBK) has cut the benchmark interest rate by the largest margin since the start of Covid-19 economic hardships in March 2020, signalling relief for borrowers saddled with costly loans and reversing a slowdown in demand for credit. The CBK Monetary Policy Committee Tuesday cut the key lending rate by 0.75 percent, or 75 basis points, from 12.75 percent to 12 percent, after inflation fell to its lowest level in more than a decade. The CBK considers credit growth of 12 to 15 percent to be sufficient to support the healthy growth of the economy. “In our view, the modest effect of the rate cut on lending rates can be attributed to the fact that the cut was not substantial enough to provide significant relief to borrowers. Last month the US Federal Reserve cut its benchmark rate by 0.5 percent and hinted at further cuts following weakness in the labour market and easing inflation.

Source: Daily Nation October 09, 2024 03:12 UTC