The Central Bank of Kenya (CBK) has revealed that 27 local lenders have an exposure of Sh695.3 billion to the expiring London Inter-Bank Offered Rate (Libor), asking them to put in place an alternative reference rate by the end of the year to avoid disruptions in payment flows.
The Libor is deployed as a reference rate when pricing credit or financing in the international markets, with local banks using it for loans, deposits, off-balance sheet commitments and Tier II capital instruments over various tenors.
