Monetary Policy Committee(MPC) ,the Central Bank's Policy making wing on Tuesday dropped the Central Bank Rate (CBR) by a good margin of 0.5% from 10.5% to 10 %.
Central Bank's Governor Patrick Njoroge said the move was as a result of two reasons,one being a forseen inflation rate drop in the near future and two was to encourage and protect private sector growth which currently seem compromised.
According to the new banking law,interest rates on loans charged by commercial banks should not over 4% above the CBR.With the CBR at 10% ,the maximum interest rate charged by lenders on loans should be at 14%.That's the impact of the Tuesday MPC meeting.
Many major banks including the KCB,Equity Bank,Cooperative Bank,National Bank,I&M Bank,ABC Bank,Barclays Bank,Commercial Bank of Africa,Bank of Africa,CFC Stanbic,Standard Chartered Bank has capped interest rate on credit facilities at a maximum of 14.5% pa,4% above the 10.5% CBR then on Septmeber 14th 2016.
Central Bank's Governor Patrick Njoroge said the move was as a result of two reasons,one being a forseen inflation rate drop in the near future and two was to encourage and protect private sector growth which currently seem compromised.
According to the new banking law,interest rates on loans charged by commercial banks should not over 4% above the CBR.With the CBR at 10% ,the maximum interest rate charged by lenders on loans should be at 14%.That's the impact of the Tuesday MPC meeting.
Many major banks including the KCB,Equity Bank,Cooperative Bank,National Bank,I&M Bank,ABC Bank,Barclays Bank,Commercial Bank of Africa,Bank of Africa,CFC Stanbic,Standard Chartered Bank has capped interest rate on credit facilities at a maximum of 14.5% pa,4% above the 10.5% CBR then on Septmeber 14th 2016.
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