MPC meets on November 28 to set new base rate
The Central Bank of Kenya’s top decision-making organ, the Monetary Policy Committee, will hold its next meeting on November 28, it said yesterday, with the outcome closely watched by banks. During its last meeting on September 20, the MPC cut the Central Bank Rate by 50 basis points to 10 per cent, against the wish of majority of analysts.The decision resulted in banks being required to lower maximum interest on loans to 14 per cent, barely a week after the Banking (Amendment) Act 2016 came into force with an interest cap at 14.5 per cent. The amended law requires the banks not to charge more than four percentage points above the CBR on loans, and pay a minimum interest of 70 per cent of the CBR on term deposits. The decision is driven by trends in inflation which rose slightly.