Kenya Makes Bold Economic Moves

President Uhuru Kenyatta has signed a law that scraps a cap on banks’ commercial lending rates which had been blamed for stalling lending to businesses. The government and the country’s banks had blamed the cap, which the government imposed in 2016 to curb high interest rates, for constricting private sector lending growth and reducing the effectiveness of monetary policy. Besides boosting credit flow to businesses, lifting the cap is also expected to help unlock a stand-by credit facility with the International Monetary Fund, once the government shows sufficient commitment to closing a gaping fiscal deficit.

SOURCE: REUTERS AFRICA

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