Home Money Central Bank Rate to remain at 9% after the second review

Central Bank Rate to remain at 9% after the second review

For the second time now, The Monetary Policy Committee also known as the MPC revised the Central Bank Rate but retained the 9% CBR. This was done in a meeting that was held on the last week of September. Prior to the first reduction of the CBR, banks were charging hefty interests on loans in excess of 23%.

This has made it hard for Kenyans to repay loans due to the overburdening interests. However, the president saw the need to revise the interest rates so as to facilitate fairness in the financial sector. Ever since loans have been affordable and banks have diversified their approach to making more money.

MPC retains Central Bank Rate at 9%

Interestingly, the banks still make huge profits even after the reduction of the Central Bank Rate. At the moment, all commercial banks in Kenya are allowed to charge an interest rate of between 9% and 13 %. This is the recommended rate by the monetary policy Committee.

Following the reduction of the interest rates. Banks have become accommodative to almost all people in need of loans so as to increase their credit score. Prior to that, loans were mostly given to borrowers who were seeking huge loans into the million. Most average Kenyans felt discriminated against as they could not get basic loans to improve their lives. As such, the retention of the interest rate at 9% is a welcome move from the MPC. All Kenyans will continue to have access to bank loans at a fair rate.

Still, the standard rate has enabled small Saccos and cooperatives to be competitive with mainstream banks. During the Monetary Policy Committee, the central bank Governor, Patrick Njoroge stated that the MPC decided to retain the CBR at 9% after noticing that the rate had some positive economic factors including tolerance to inflation, and a decrease in NPL also known as non-performing loans.

Central Bank Rate to remain at 9% after the second review 1
Money Guy
This guy understands PESA like no other. He is kind with words and always willing to help even when he is far away behind a computer. You can reach him through the comments section.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest articles

Asset Financing in Kenya: The Definitive Guide [2019]

Asset Financing In Kenya is the only bridge between dreams and reality for many.However, many Kenyans find it hard to achieve their dreams of...

Types Of Loans At Kenya Women Finance Trust (KWFT)

Kenya Women Finance Trust (KWFT) is a financial institution dedicated to meet the needs of women and girls. So in today's article, we will discuss...

Top 6 Equity Bank Business loans

While you are starting a business or a project you require money, but then you may necessarily not have it then but that should...

Emergency loans in Kenya: Where and how to get them in 2019

Today, I will show you where to get emergency loans in Kenya. I know there comes a time when we are in dire need...