The Central Bank of Kenya has lowered the lending rate to 7.25 per cent down from 8.25 per cent just two months ago.
The new rates come as a relief to borrowers who may seek credit because of the economic slowdown that is being experienced owing to the coronavirus global pandemic.
The CBK also reduced the cash reserve ratio from 5.25 per cent to 4.25 per cent, which saw the bank release Sh35.2 billion back to banks as a way of increasing liquidity to distressed borrowers
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According to the Central Bank’s Monetary Policy Committee, the decision to lower rates was informed by the private sector’s credit appetite which has grown by 7.7 per cent in the last 12 months to February.
Other factors considered were the Covid-19 outbreak that has left the global economy in distress with the committee predicting tough times ahead.
