Small banks take up costly credit as liquidity tightens

Central Bank of Kenya. FILE PHOTO | NMG

Tight liquidity in the money market continued to pile upward pressure on interbank rate last week, exposing smaller cash-starved commercial banks to higher cost of borrowing in the overnight window.

The rate rose 97 basis points to 8.13 per cent in the week ended October 4 compared with 7.16 per cent seven days earlier, the Central Bank of Kenya (CBK) reported in this weekly bulletin.

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