Pressure on banks to loan private sector as cash piles

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Central Bank of Kenya. FILE PHOTO | NMG

The amount of liquidity in the banking sector has gone up as the government continues to release payments to contractors and its agencies, with eyes now on the lenders to see if they will increase their lending to the private sector.

The interbank rate — at which banks lend to each other on an emergency basis — has fallen to a two-month low of 3.33 percent, indicating banks are under less pressure to meet their daily cash requirements.

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