Average bank lending rates reached a 52-month high in December 2022, driven by rate hikes by the Central Bank of Kenya (CBK) and higher yields on government papers, Business Daily newspaper said.
The average loan rate rose to 12.67% in December 2022, according to CBK data. This is the highest average lending rate since August 2018, when it stood at 12.78%.
The resulting hike in lending rates came after the central bank raised the benchmark interest rate in September by 75 basis points to 8.25% to stem inflation.
According to the report, rates on government paper, mostly Treasury bills that influence the costs of savings, have increased the state’s appetite for domestic borrowing.
The 91-day T-bill is close to crossing the 10 percent mark and has increased to 9.65% from an average of 7.8% in June last year.
(Editing by Seban Scaria firstname.lastname@example.org )