Sharp Daily
No Result
View All Result
Saturday, August 9, 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

The Government Eases Domestic Borrowing to Lower Interest Rates

Patricia Mutua by Patricia Mutua
August 11, 2023
in News
Reading Time: 2 mins read

The government of Kenya has trimmed its domestic borrowing goal by Kshs 270.5 bn as it moves a significant portion of the budget deficit financing to international markets. This manoeuvre aims to alleviate the strain on local interest rates, which has raised concerns about the government’s impact on the private sector. By reducing domestic borrowing, the Treasury anticipates having additional foreign currency to pay off debts and stabilize the country’s currency, the Shilling. According to the Central Bank of Kenya (CBK), the net domestic borrowing target has been lowered to Kshs 316.0 bn from Kshs 586.5 bn. Consequently, the remaining Ksh270.5 billion has been allocated to external borrowing, increasing the international target to Kshs 402.0 bn from Kshs 131.5 bn.

Read more: Growth in New Loan Accounts in Kenya Reduces on The Back of the Government’s Overreliance on Domestic Borrowing

The budget shortfall for Kenya in the current fiscal year remains at Kshs 718 bn. The CBK governor, Mr. Kamau Thugge, revealed that this new external funding would be sourced from both regional and global multilateral financiers. The expected outcomes of this strategy include a reduction in domestic interest rates, which have surged recently, and an enhancement of foreign exchange reserves as external borrowing is initiated. Mr. Thugge also noted that the majority of the funding would be concessional, with some funds accessed under commercial terms.

Read more: Kenya’s Credit Outlook Downgraded Amid Tight Liquidity Position

RELATEDPOSTS

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

May 21, 2025

Kenya’s risk-based credit pricing: Five years on

April 24, 2025

However, the impact on interest rates and reserves will depend on the government’s adherence to the revised borrowing target. Investors will closely monitor this commitment and its effect on the market. Additionally, the CBK expects the foreign exchange generated from increased external borrowing to aid in repaying maturing obligations, such as the 2014 Eurobond, due for repayment in June 2024. The CBK is optimistic about retiring the bond using reserves following the revised external borrowing plan. Typically, the monetary regulator exchanges shillings for dollar proceeds from external loans to facilitate local spending.

Email your news TIPS to editor@thesharpdaily.com

Previous Post

Airtel Uganda seek to issue an IPO on the Uganda Securities Exchange

Next Post

Kenya and Mozambique Ink 8 Cooperative Agreements to Strengthen Economic Ties

Patricia Mutua

Patricia Mutua

Related Posts

commercial illustrator
News

Why Kenyan private equity firms should consider continuation funds as an exit strategy

July 23, 2025
Business

Del Monte foods files for bankruptcy in USA

July 3, 2025
News

Private vs Public Pension Funds in Kenya

June 30, 2025
Investments

Investor shift to long term bonds drives oversubscription in CBK’s reopened auction

June 19, 2025
News

The real price of Israel – Iran Conflict for Kenya.

June 19, 2025
Economy

Resilient but strained: Kenyan firms speak out in May 2025 CEO survey.

June 19, 2025

LATEST STORIES

Segregated Pension Schemes in Kenya Q2’2025 Performance

August 8, 2025
Asset allocation dividing an investment portfolio among different asset categories.

Building a Retirement Portfolio in Kenya

August 8, 2025

Steps banks can take to align with fair lending practices

August 7, 2025

The hidden cost of outdated economic statistics

August 7, 2025

EABL posts 12.2% profit surge, strengthens regional footprint despite rising illicit trade

August 1, 2025
1049795356

Maximizing Your Pension Contributions

August 1, 2025

The functional role of narrative in financial markets

August 1, 2025

Tanzania’s protectionist shift and what it means for Kenyan entrepreneurs and regional trade

July 31, 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