Kenya’s central bank slashed its benchmark lending rate, for the first time in more than a year, recently to kick off more business activities.
The committee, which oversees the policy decsions directed the apex bank to reduce the interest rate by 50 basis points (0.5%) to 8.50%. Recently, Kenya removed a cap on commercial interest rates on the plea that it had stifled credit growth and economic growth. It is also significant to note that the bank maintained the benchmark rate for one year before the recent cut. Monetary analysts maintained that this time around also there would not be any cut in the interest rate and the reduction. Hence, interest rate cut surprised many.
