The Central Bank of Kenya (CBK) has cut the base lending rate by half a percentage point to 10.75 percent and reduced the cash holdings requirement for banks by a similar margin to 3.25 percent in order to boost lending to the private sector.
The CBK’s move to cut the cash reserve ratio (CRR) is expected to free up to Sh57 billion in additional liquidity that banks can then lend to the private sector. The CRR represents the percentage of deposits that banks are required keep at the CBK as reserves.
