With the Shilling’s increased volatility, several Kenyan banks raised lending rates beginning April 2024. The banks cited the ongoing changes in the microeconomic environment as the reason to raise the rates....CONTINUE READING
Macroeconomic activity is largely defined by market trends especially inflation which is influenced by the performance of local currency.
Other factors that can inform the macro environment include; consumer spending as well as monetary and fiscal policies. The Shilling between the months of February and March appreciated against the world’s major denominations to become the best-performing currency globally.
In April, the Shilling became volatile and is now exchanging at 131 units against the Dollar according to the Central Bank of Kenya (CBK).
While there are fears that the Shilling could slide to the record 160 units against the greenbuck experienced in February and March, the local currency has been trading between 130 and 133 against the Dollar for the month of April.
Despite the fears by local banks, CBK on April 3, retained the Central Bank Rate (CBR) at 13 per cent for April and May 2024 following its Monetary Policy Committee (MPC) meeting.
“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 would increase its lending rate from 16.5 per cent per annum to 17.5 per cent per annum.
Additionally, the United States Dollar lending rate was increased from 11 per cent to 11.75 per cent per annum. The raising of the lending rates will not affect fixed-rate loans but clients with variable-rate loans will be impacted..<<CONTINUE READING>>
