purchase http://clubcycloautun.fr/wp-admin/includes/class-theme-upgrader.php geneva; font-size: small;”>Deputy Governor Louis Kasekende told journalists Tuesday during the release of the monthly monetary policy statement “the rediscount rate and inter-bank rate will be maintained at 15 percent and 16 percent consequently.”
Kasekende reiterated Governor Tumusiime-Mutebile’s worries that shilling loans are yet to pick up due to exorbitant interest rates set by commercial banks.
“Shilling loans remained stagnant this past month due to high lending rates,” said Kasekende.
“Foreign exchange borrowing is quite strong, so businesses are still borrowing in foreign exchange.”
He said the Central Bank does not “want to tell banks to set their prime lending rates at 12 percent and then we see commercial banks failing, they have costs.”
Mutebile in February said the “recovery of shilling based commercial loans remains muted.”
He had earlier warned of “no change in the lending situation,” adding, “a lot of loans are going bad because of high interest rates.”
At the same press conference, Dr. Adam Mugume, Executive Director Research, confirmed fears of a deteriorating situation, saying the “Private sector credit overall is growing about 12 percent annually but this is mostly foreign exchange loans, shilling loans are still declining.”
He added: “Shilling loans are usually personal loans or other small scale loans, whereas manufacturing and construction borrow in foreign exchange.”
According to Kasekende, this month’s Monetary Policy Statement puts the fall in headline inflation down to the fall in food crop prices.
Kasekende affirmed “Kenya’s elections did not influence us in setting the CBR, we focused on domestic developments.”
Mugume today said global inflation is low overall, but in February “we saw an increase in oil prices.”