Kenya raises policy rate to 13%, the highest in 12 years

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The decision has effectively given commercial banks the signal to increase their lending rates, setting up borrowers for a new era of expensive loans

Staff Writer, The East African

February 7, 2024

KENYA FINANCIAL SERVICES

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The Central Bank of Kenya (CBK) has raised borrowing costs to highs last seen nearly 12 years ago, as it moved to contain stubborn inflation and pull a handbrake on the free fall of the Kenya shilling.

The banking sector regulator on Tuesday increased its base lending rate by 50 basis points from 12.5 percent to 13 percent, a level last witnessed in the sunset years of President Mwai Kibaki’s administration.

The decision has effectively given commercial banks the signal to increase their lending rates, setting up borrowers for a new era of expensive loans.

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