Khusoko – East African Markets
    Facebook Twitter Instagram
    Khusoko – East African MarketsKhusoko – East African Markets
    • NEWS
    • ECONOMY
      • BANKING & FINANCE
      • COMPANY
      • MARKETS
    • INDUSTRY
      • AGRICULTURE & ENVIRONMENT
      • HEALTH & WELLNESS
      • PROPERTY
        • RETAIL
      • TECHNOLOGY
        • ELECTRONICS
    • ENTREPRENEURSHIP
      • ENTREPRENEURS
      • PEOPLE
      • PERSONAL FINANCE
    • SPORTS
    • COMMENTARY
    • ARTS & CULTURE
      • BOOKS
      • ENTERTAINMENT
      • FAMILY & RELATIONSHIPS
      • FASHION & STYLE
      • FOOD & DRINK
      • TRAVEL & LEISURE
    Khusoko – East African Markets
    MARKETS

    Central Bank of Kenya will Ease Policy if Parliament Reverses Rates Cap

    KhusokoBy Khusoko2019-07-15Updated:2020-04-042 Comments2 Mins Read
    The Central Bank of Kenya Head office in NAirobi.
    Central Bank of Kenya building

    The Central Bank of Kenya (CBK) is forecast to cut interest rates when its Monetary Policy Committee meeting to make a decision on the direction of the Central Bank Rate (CBR) on  July 24, 2019.

    Commercial Bank of Africa analysts say the tame inflationary pressures coupled with the output gap should limit any scope for monetary tightening. 

    “On the other hand, prospects of easing may be dented by prospects of pervasive outcome where easing causes markets to instead tighten. Therefore, the CBK may keep the CBR on hold unless parliament approves the reversal of the interest rates cap, restoring efficacy of monetary policy signaling.”

    READ:

    • Rate caps have delivered perverse outcomes of Monetary Policy – CBK

    When the MPC last met in May, held its lending rate at 9% attributed to the optimum performance of the general economy amidst volatility jitters both internally and externally.

    With a proposal to repeal the law currently included in the Finance Bill 2019, Cytonn Investments says they “Expect an amendment of the law, possibly in the way of an increase in the margin from the current 4.0% above the Central Bank Rate (CBR).”

    The Kenya Bankers Association (KBA) State of Banking Industry Report 2019, shows interest rate caps prompted adjustments that saw banks shift from riskier segments to investments that balance returns and asset quality.

    The Banking (Amendment) Act, 2016 that introduced caps on lending rates have seen the market:

     (i) gradually shift away from segments considered riskier 

    (ii) seek to optimise on investments that balance returns and asset quality 

    (iii) respond to both risks and returns balance depending on liquidity positions, which in themselves are a function of size of the bank and chosen market segment.

    Commercial Bank of Africa Monetary Policy Committee
    Khusoko

    Multimedia platform providing analysis of business & financial news in East Africa.

    Related Posts

    Kenya Offers Second Infrastructure Bond Worth Ksh 60Bn

    2023-05-30

    Kenya’s Central Bank Keeps Lending Rate Steady at 9.50%

    2023-05-29

    Finance Bill 2023: Kenya’s Most Extensive in The Recent Past

    2023-05-28

    Leave A Reply Cancel Reply

    Our Language is Flirty
    https://www.facebook.com/flirtynailsparlour/
    MORE TOP STORIES
    • Kenya Offers Second Infrastructure Bond Worth Ksh 60Bn
    • Oppo Launches Find N Flip its Foldable Smartphone in Kenya
    • Kenya’s Central Bank Keeps Lending Rate Steady at 9.50%
    • Investing in Healthcare: M-PESA Foundation’s KSh 46 Mn Investment in Medical Camps
    • Do You Feel Sudden Heavy Emotions? Here’s How to Manage It
    • Facebook
    • Twitter
    • LinkedIn
    Facebook Twitter LinkedIn
    • ABOUT US – KHUSOKO
    • PRIVACY POLICY
    • KHUSOKO STANDARDS GUIDE
    © 2023 Khusoko. All Rights Reserved.

    Type above and press Enter to search. Press Esc to cancel.