Borrowers can now breathe a sigh of relief after the Central Bank of Kenya (CBK) reduced its standard loan rate to 8.25 per cent.
The loan rate cuts down from a previous 8.50 per cent and is aimed at boosting the economy that is still struggling to pick its form.
The decision was reached after the CBK's Monetary Policy Committee meeting. The committee noted that the move was as a result of a state that assured inflation expectations were within the mark and a struggling economic growth rate.
In addition, the reduction reverberates the November 2019 move to cut the CBR to 8.50 per cent. With a previous lending rate stagnating at 9.0 per cent severally.
"The Committee assessed that the effects of the lowering of the CBR in November 2019 continued to be transmitted in the economy, but also noted that there was room for further accommodative monetary policy to support economic activity,” MPC’s Chair Governor Patrick Njoroge was quoted by the Capital FM.
Meanwhile, CBK hopes that the inflation will remain within the target range within the period as a result of low prices of fast-growing food items due to unabated rains and low electricity prices.
At the same time, the banks are expected to reduce loaning rates to its customer and ease the pain of having to pay much.