Dollar Inflows from Non-Governmental Organizations Boosts Shilling

Market activity on the last trading day of the month declined marginally but all the indices were in the green. The NSE 20 Share index increased by 62.01 points to close the day at 3178.83 points, while the NASI added 1.62 points to settle at 134.94 points.

The NSE 25 Share index gained 94.96 points to end the day at 3519.32 points. Shareholders wealth expanded to KES 1943.201 billion from KES 1919 billion previously, whilst equity turnover dropped to KES 1.78 billion from KES 1.81 billion yesterday owing to a slight fall in the volume of shares traded.

 CFC Stanbic has become the first bank to cut rates for existing loans following the move by President Uhuru Kenyatta to sign the Bill capping interest rates on bank loans into law. The new rate for both old and new loans at CFC is now 14.5 percent. KCB has also lowered interest rates for existing loans to not more than 14.5 percent, Group CEO Joshua Oigara has asked customers to contact branches for details.

The bank in a statement said both new and existing loans will enjoy the 14.5 per cent cap on rates and urged customers to get in touch with their branches from tomorrow to review and amend their banking facilities documents to reflect the new interest rate regime. The new law caps loan interest rates at 4 per cent above the central bank rate which is 10.5 percent.

Read: Equity Bank Posts KES 10.1Bn Profit in 2016 Half year results

 Currencies

The Kenyan shilling was stable on Wednesday and was seen gaining due to dollar inflows from non-governmental organizations. The local currency gained albeit marginally against the Sterling and was slightly changed against the Euro.

Since the UK public voted out of the EU, a cloud of uncertainty has surrounded the UK economy and therefore sterling exchange rates. The UK did cut interest rates this month and are now pumping a large amount of quantitative easing into the economy, which overtime should devalue sterling.