Monetary Policy Committee (MPC) retained the Central Bank Rate (CBR) at 9Percent during the July 24th Meeting.
This means commercial banks regulated by Central Bank of Kenya (CBK) will charge a maximum of 4 percent above CBR on loans issued. The maximum interest rate a bank can charge therefore is 13 percent.
The MPC team chaired by the CBK governor Dr Patrick Njoroge had the following reasons for the decision on retained CBR;
- Overall inflation remained relatively stable and within the target range.
- The foreign exchange market has remained relatively stable
- Private sector credit grew
- The banking sector remained stable and resilient .
- The economy remained strong
- Previous MPC survey report shows inflation expectations in control
- The committee noted the withdrawal of the older kes1000 notes (demonetisation) and the close monitoring by CBK will ensure that the process is not disruptive to the economy.
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