East African central banks are easing interest rates to allow more lending to the key growth sectors of the economy, basing their decisions on promising prospects of dropping inflation. Kenya, Uganda and Rwandan central banks in their latest policy rate reviews reduced their benchmark lending rates to commercial banks. The latest policy positions by the regional central banks signals the regulators’ intentions for commercial banks to reduce lending rates and review downwards the cost of loans for customers with variable interest rate facilities. “Whenever we cut the Central Bank Rate (CBR), we consider inflation and economic growth in perspective over 12 months. This situation will encourage commercial banks to cut lending rates, expand their loan books, and eventually boost economic growth along the way,” said Adam Mugume, BoU’s Executive Director for Research.

Source: Daily Nation October 10, 2024 15:52 UTC