Sharp Daily
No Result
View All Result
Monday, June 2, 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

Rise in Interbank Rates Fuels the Cost of Borrowing

Dennis Otsieno by Dennis Otsieno
April 3, 2023
in News
Reading Time: 2 mins read
CBK reinstates transaction charges

Central Bank of Kenya (CBK) headquarters. [Photo/ Courtesy]

The high interbank rate is likely to fuel the rise in the cost of loans in the wake of an increase in base lending rate by the Central Bank of Kenya.

The weekly report by the Central Bank of Kenya shows the interbank rate was at 7.7 percent for the week ending March 31, having gone up 18 per cent in the past four weeks.

On Wednesday last week, CBK raised the benchmark lending rate from 8.75 percent to 9.5 percent to contain the economy’s soaring inflation.

Read: MPC Hikes Interest Rates to 9.5% from 8.75%

RELATEDPOSTS

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

May 21, 2025

Balancing between inflation and unemployment

May 5, 2025

The high interbank rate saw the number of interbank deals decreased to 33 from 43 in the previous week, while the average value traded decreased to Kshs 20.6 billion from Kshs 28.1 billion as at 31st March.

While both high interbank rates and base lending are likely to limit the money supply in the market, the two measures are likely to stabilize the market by containing inflationary pressures.

March inflation rate stands at 9.2 percent, according to data from the Kenya National Bureau of Statistics. This is unchanged from February, after rising from 9.0 in December last year and 9.1 in January this year.

Read: Volatile Inflation Likely to Hinder Kenya’s Economic Growth

This implies a clear picture of un-easing inflationary pressures on consumers with a further depreciation of the shilling adding more strain.

On a year-to-date, the shilling has shed by 7.4% of its value, now at 132.5 from 123.4 recorded at the beginning of the year.

The weakening shilling has also been piling pressure on the country’s forex reserves which have further dipped to lows of 3.6 months of imports cover. This is below the statutory threshold of at least four months of import cover.

Central banks globally use the interest rates as either a gas pedal or a brake on the economy when needed. They set the short-term borrowing rate for commercial banks, and the banks pass it along to consumers and businesses.

Email your news TIPS to editor@thesharpdaily.com

Previous Post

Amazon To Set up A shop In Nairobi

Next Post

Reason Why National Oil Was Locked Out of the UAE Deal

Dennis Otsieno

Dennis Otsieno

Related Posts

News

Co-op Bank posts KES 6.9 billion profit in Q1’2025

May 16, 2025
Agriculture And Economy
News

Lets get Kenya out of FATF list

May 9, 2025
News

The downside of Impact Investing

May 2, 2025
News

Leadership challenges at the University of Nairobi

April 24, 2025
News

Easter eggs and earnings: Growing your nest egg with CMMF

April 16, 2025
News

Geoffrey Ruku declares KES 377M net worth during CS vetting

April 15, 2025

LATEST STORIES

Best investments for Kenyan seniors: Secure, predictable & low-risk

May 30, 2025

Why June is the Secret Sweet Spot for Travel

May 30, 2025

Strategies to elevate more women to corporate leadership

May 30, 2025

Tap on Kenya’s 2025 tech revolution

May 30, 2025

How CURBS supports employers and employees

May 30, 2025

NSE deserves more attention from young investors

May 29, 2025

The silent strain of remote work on Kenya’s urban workforce

May 29, 2025

How Kenya’s crypto bill could reshape the digital economy

May 29, 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