Banks Consider Increasing Lending Rates

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Chrispen

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Monday, April 22, 2024 –Banking institutions in the country have raised their lending rates citing current increased shilling volatility.

In this month of April going ahead, banks have agreed to increase the rates so as to tap into the financial market trend and microeconomic environment.

Apart from microeconomic and macroeconomic factors, other factors are monetary and fiscal policies as well as consumer spending.

Between the months of February and March 2024, the Kenyan shilling appreciated drastically as the world dollar weakened.

Infact, economists described the shilling performance as the world’s best performing currency across the world.

Today headed to May, the Shilling remains volatile and is now exchanging at 131 units against the Dollar. This is according to the Central Bank of Kenya CBK latest market reports.

This performance is however surrounded by fear that the shilling could slide back to a weak position despite its impressive show now almost two months.

“The MPC noted that overall inflation is expected to continue declining in the near term, supported by lower food and fuel prices, and pass-through effects of the recent exchange rate appreciation,” CBK banked on the strength of the Shilling while maintaining the CBR.

One of the Kenyan top banks revealed that it is planning to raise its lending rate from 16.5 per cent per annum to 17.5 per cent per annum.

Additionally, the United States Dollar USD lending rate has increased from 11 per cent to 11.75 per cent per annum.