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

    CBK Governor Terms Rate Cap as ‘Temporary Deviation’, Legislators Reject its Repeal

    David IndejeBy David Indeje2019-09-18Updated:2019-09-18No Comments2 Mins Read
    Central Bank of Kenya Governor Patrick Njoroge Photographer: Luis Tato/Bloomberg
    Central Bank of Kenya Governor Patrick Njoroge Photographer: Luis Tato/Bloomberg

    Dr. Patrick Njoroge, Kenya’s Central Bank governor has maintained that caps on commercial lending rates would eventually be removed, terming them a ‘temporary deviation’ even as Members of Parliament on Wednesday opposed repealing sections of the Banking (Amendment) Bill 2019.

    “This is only a matter of time,” said Dr. Njoroge at the Renaissance Capital’s 5th Annual East Africa Investor Conference held in Nairobi.

    “Our view is, do not get fixated with interest rate caps. Be assured that with time, as soon as possible, that will be removed…in general terms, that is a temporary deviation,” he added.

    In March, the Kenyan High Court gave the National Assembly one year to amend the anomalies in the Banking (Amendment) Act 2016 in a ruling that declared Section 33B (1) and (2) of the Banking Act unconstitutional or revert to free-floating interest regime.

     

    The amendment bill sponsored by Kiambu Town Member of Parliament Jude Njomo is now in its second reading, as parliament seeks to clarify wordings in the Banking (Amendment) Act of 2016.

    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 the size of the bank and chosen market segment.

    The current central bank rate (CBR) has been placed at 9.00% ahead of the upcoming MPC meeting scheduled for Monday 23rd September 2019.

    READ:

    • Analysts Say Rate Capping Remain a Constraint to Kenya’s Monetary Policy
    • Kenyan legislators’ proposal would allow SMEs negotiated risk-based interest rates
    interest rate caps Patrick Njoroge
    David Indeje
    • Website
    • Facebook
    • Twitter
    • Instagram
    • LinkedIn

    In my role as Community Engagement Editor For Khusoko, I care about our audience. engaging them, getting news delivered to them across a variety of platforms, and expanding the diversity of voices on our website.

    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.