Central Bank of Kenya (CBK) cut its benchmark lending rate by 50 basis points to 10 percent on Tuesday on concerns about sluggish credit growth, its Monetary Policy Committee (MPC) said.
A Reuters consensus forecast of 12 economists and analysts was for rates to be held, based on the view that the bank would give a new law capping commercial lending rates time to settle before taking action.
But the MPC said lending to the private sector had continued to decline, posing a risk to economic growth.
“Demand pressures on inflation are moderate and inflation is expected to decline in the short term but the committee remains concerned about the persistent slowdown in private sector credit growth,” the MPC said in a statement.
