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The cost of accessing loans is set to increase after the Central Bank of Kenya's Monetary Policing Committee (MPC), chaired by governor Patrick Njoroge raised the lending rate from 7.5% to 8.25%.
In a statement issued on Thursday, September 29, the MPC noted that the Kenyan economy faced global uncertainties, volatile financial markets, a weaker growth outlook and persistent inflationary measures.
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The MPC indicated that inflation increased to 8.5% in August from 8.3% in July due to an increase in food and fuel prices.
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The committee noted that it may take additional measures as it continues to monitor the policy measures and the developments in the domestic and global economy.
Njoroge explained that the CBK foreign exchange reserves stood at $7409 million (4.18 months of import cover) and would provide a buffer against short-term economic shocks.
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In May, the regulator raised the lending rate to 7.5%, for the first time in seven years.
The MPC said the increase was meant to match inflation expectations due to a surge in commodity prices.
The MPC said it reviewed the lending rate against a backdrop of a changed global outlook, with elevated global inflationary pressures and heightened geopolitical tensions.
In other news, President William Ruto promised to work with the private sector to make credit available for small business owners.
Ruto said his government will collaborate with credit lenders to develop a loan product for mama mboga and Boda Boda operators.
In a joint press conference by Safaricom, KCB, and NCBA on Wednesday, September 28, Ruto said small traders can access credit at a single-digit interest rate.
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Source: TUKO.co.ke
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