State retreats from domestic borrowing to cool interest rates

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Central Bank of Kenya Governor Dr Kamau Thugge at a past event on July 17, 2023. PHOTO | LUCY WANJIRU | NMG

The government has cut domestic borrowing target by Sh270 billion as it shifts the bulk of budget deficit financing to the external markets in an effort to ease pressure on domestic interest rates amid growing concerns that the State was crowding out the private sector.

The decision to cut domestic borrowing promises to give the Treasury fresh forex to retire loans and prop up the shilling.

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