The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Kenya’s Treasury Secretary, Henry Rotich, has indicated plans to repeal the rate cap law as part of the contentious reforms demanded by the International Monetary Fund to extend a frozen Kshs 153bn emergency standby facility that expires this month.
The facility, which is designed to alleviate a balance of payments crisis, had been suspended in June last year.
Jan Mikkelsen, the IMF’s Kenya resident representative, said a cut on the budget deficits and review of the legal lending cap were “key” to extending the facility.
The Kenyan government in September 2016 capped commercial lending rates at four percentage points above the central bank’s benchmark rate, which stands at 10%, and put a minimum deposit interest rate of 70 % of the benchmark.
This followed the review of the Banking (Amendment) Act 2016 at a time when the average interest rate stood above 18 %, a level that was seen as unaffordable for the dominant SMEs.
