Central Bank Rate (CBR) Reduced by 50 Basis Points to 9.50%

The Central Bank of Kenya has reduced the Central Bank Rate by 50 basis points from 10.00 percent to 9.50 percent.

The reduction comes as a surprise to many as it is the first since the introduction of the interest capping law.

The move has been seen as CBK’s preparation ahead of the expected changes in the interest capping law which the Treasury has admitted that it is unsustainable.

“The MPC noted that inflation expectations were well anchored within the Government target range, the increased optimism for growth prospects in the economy and that the economic output was below its potential level,” read the statement from CBK.

According to the Central Bank, there was a scope of easing the monetary policy stance in order to support economic activities.

“The Committee has decided to reduce the Central Bank Rate (CBR) to 9.50 percent from 10.00 percent,” read the statement.

Below is the statement from the Governor, Central Bank of Kenya: