Measures to Check the Falling Shilling.

6 Oct

Central Bank of Kenya raise the benchmark lending rate by 400 basis points to 11% in a bid to rescue the fast falling shilling and rein on the soaring costs of living.

The MPC took the bold move which was unexpected by any player and spectator. It was a little late but it is still a correct one.

The shilling respond positively to the move rising from Tuesdays avarage of 102 to 101 to the dollar and is expected to firm below the Ksh100 mark to the dollar gradual as the market reacts to the move.

This increase in CBR will make lending rates higher, increasing the cost of loans and credit thus reducing the pace at which some sectors of the economy has been growing such as the real estate in the last few years.

Nevertheless increase in CBR will make the govertment bounds attractive to investors.

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One Response to “Measures to Check the Falling Shilling.”

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