Another source of possible conflict could be whether the Central Bank Rate, (the rate at which Central Bank lends to banks), or Kenya Banks Reference Rate, should be used. “It has been assumed it is the Central Bank Rate but Central Bank may opt to use the Kenya Banks Reference Rate or create a new rate,” said Mr Olaka. The Central Bank Rate is the price at which distressed commercial banks borrow from Central Bank. It is calculated as an average of the 91-day Treasury Bill rate and Central Bank Rate. The minimum return offered to depositors will be 7.35 per cent under Central Bank Rate and 6.23 per cent using bank’s reference rate.

Source: Daily Nation August 25, 2016 22:57 UTC