CREDIT RAT­ING LIKELY TO DROP OVER STATE BOR­ROW­ING

The Star (Kenya) - - News -

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.

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.