The Rise of the Central Bank Lending Rate and the Kenyan Economy.

2 Nov

Kenyan economy is bleeding, with the treasure and the Central Bank trading blame on who to blame for the weaken shilling and the rising inflation.

Easy loans will be hard to come by now since the Monetary Policy Committee bowed to pressure by IMF to raise its base lending rate to boost the Kenyan Shilling, which has continued to take a hit, despite the measure it had put in place to curb the slide leading the shilling being among the worst performing currency in the world.

The CBR is now 16.5%, the highest in the world this year, the Kenyan Shilling is expected to stabilise with having closed today (2nd Nov) at 96 to the dollar and will help to ease the inflation that has continued to rise, bring a relief to the consumer.

In the longterm this will be a win-win situation but the borrowers are expected to suffer from the anticipated interest hick by the commercial banks. Growth and expansion by the business is expected to be put on hold by the businesses and small businesses are also expected to suffer with the rise in the interests rates they are expected to pay.The Shillings


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