Sharp Daily
No Result
View All Result
Saturday, November 1, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home News

Central Bank of Kenya Implements New Interest Rate Corridor to Address Interbank Liquidity Challenges

David Musau by David Musau
August 14, 2023
in News
Reading Time: 2 mins read
Money

Money [Photo/ Courtesy]

The Central Bank of Kenya has taken steps to address interbank liquidity challenges linked to interbank lending. The CBK introduced a new interest rate corridor that sets the lending rate among banks. This corridor restricts interbank lending rates to a specific range. In the recently held monetary policy committee meeting of 9th August, measures to maintain the inflation target range of 2.5 percent to 7.5 percent were approved by the committee, introducing the new interbank corridor at 2.5 percent below or above the central bank rate (CBR).

Read more: CBK Should Consider Implementing an Interest Rate Corridor

CBK governor Kamau Thugge said the monetary policy operations would be aimed at ensuring that the interbank rate, as an operating target, closely tracks the CBR. The framework allows the CBK’s open market operations to be conducted on the basis of a flexible rate fixed quantity, as is currently the case. This implies that the CBK will determine the amount of liquidity to inject or withdraw from the banking system, and banks will be free to bid for the amount of liquidity they need or offer at their bid or offer price.

This strategy aims to oversee the interest rates that banks can apply, thereby augmenting the efficiency of translating resolutions put forth by the Monetary Policy Committee. For smaller banks grappling with a funding problem due to a significant surge in interest rates, this measure will provide much-needed relief. The recent escalation in interest rates has had impacts on the expenses associated with borrowing in the interbank market. Typically, banks address their deficits by borrowing from one another to secure a portion of their funding.

RELATEDPOSTS

How Kenya’s bond market boom could benefit everyday investors

October 29, 2025

Real yields vs. nominal yields on Kenya’s government bonds

May 21, 2025

Read more: Central Bank of Kenya Holds Benchmark Interest Rate Steady at 10.5%

The recent growing dependence of tier two and three banks on the CBK for financial support has led to a decrease in the cumulative deposits held by the Central Bank. The Kenya Bankers Association (KBA) highlighted that smaller banks, facing difficulties in obtaining funds from larger institutions due to perceived risks, have been particularly impacted by stricter funding conditions.

Email your news TIPS to editor@thesharpdaily.com

Previous Post

Stanbic Bank Kenya Implements Risk-Based Pricing, Sets Highest Interest Rate at 19 Percent

Next Post

Finsco Africa Teams Up with National Bank of Kenya to Provide Land Financing Opportunities

David Musau

David Musau

Related Posts

Economy

CBK reopens treasury Bonds

October 31, 2025
Police recruitment Kenya
Legal

Court halts police recruitment in Kenya over constitutional breach

October 31, 2025
News

How to Maximize Returns from the Cytonn Money Market Fund

October 31, 2025
News

Domestic investors drive NSE recovery as foreign activity slows

October 30, 2025
News

ICPAK introduces UDIN system to enhance audit integrity and public trust

October 30, 2025
News

Who Should Invest in a Money Market Fund

October 29, 2025

LATEST STORIES

Artificial intelligence in marketing: when AI becomes the brand

October 31, 2025

CBK reopens treasury Bonds

October 31, 2025
Police recruitment Kenya

Court halts police recruitment in Kenya over constitutional breach

October 31, 2025

How Fixed Income and Equities Shape Pension Scheme Returns in Kenya

October 31, 2025

How to Maximize Returns from the Cytonn Money Market Fund

October 31, 2025

How can Kenya ease energy costs for vulnerable households

October 30, 2025

Domestic investors drive NSE recovery as foreign activity slows

October 30, 2025

Kenya’s “too stable” shilling: Market confidence or policy management?

October 30, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024