Interbank loan rates rise to 7.9pc over tight liquidity

The Central bank of Kenya, Nairobi. FILE PHOTO | DENNIS ONSONGO | NMG

The rate at which banks are borrowing from each other on an emergency basis has climbed to a three-and-a-half-year high of 7.9 percent following a drop in liquidity in the money market on the end of tax remittances to the government.

Lenders do not borrow from the interbank market for onward lending to customers and rely on the window to meet regulatory daily cash requirements.

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