CREDIT RATING LIKELY TO DROP OVER STATE BORROWING
Global ratings agency Standard & Poor said the country’s sovereign credit rating is likely to drop to ‘B’ from the current ‘B+’. Yesterday, Renaissance Capital warned the recent capping of interest rates will hurt the economy. Renaissance managing director and head of macro strategy Charles Robertson said the new law, which caps interest rates at four per cent above the Central Bank Benchmark Rate currently at 10 per cent, will lock out the poor from accessing credit. He said this will slow down their investments and contribution to the economy. “Banks will prefer to lend to a few rich people who they are sure will pay back,” Robertson said. Kenya has recently borrowed heavily mainly from China to finance infrastructure development with a huge amount going into construction of the Standard Gauge Railway.