Paradox of Kenya’s monetary easing that is creating unease

Treasury bill rates, the benchmark for the government's borrowing and a key signal of the opportunity cost for bank lending, have also fallen sharply.

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In textbook economics, when central banks cut policy rates, the script usually plays out predictably. Lending becomes cheaper, spurring businesses to invest and households to spend. Indeed, the logic is reassuringly straightforward—at least in theory.

Yet, in Kenya a clear monetary policy easing cycle has sparked confusion rather than confidence. Something odd has been happening since mid-2024.

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Note: The results are not exact but very close to the actual.