The Central Bank of Kenya (CBK) has retreated from its plans to control lending rates using its benchmark rate, handing a victory to commercial lenders who preferred to use the interest charged on short-term loans between banks to determine borrowing costs.
Official correspondence between the CBK and commercial banks shows that the banking sector regulator has made a U-turn and abandoned its earlier proposal that lenders use the Central Bank Rate (CBR) as the base for pricing loans.
