The Central Bank of Kenya (CBK) mopped up a cumulative Sh3.78 trillion in liquidity from the banking sector in the first half of the year, highlighting the disruptive effect of reduced lending to the private sector by commercial banks flush with cash.
The mop-up through repurchase agreements (repos) marked a turnaround following last year’s aggressive liquidity injections to commercial banks through reverse repos, which at the time showed skewed liquidity distribution in the sector favouring large lenders.
