Understanding the key rates published by the Central Bank of Kenya (CBK) is essential for navigating the economic landscape.
These rates influence various aspects of the economy, from inflation and savings to borrowing costs and liquidity.
For businesses, investors, and consumers alike, staying informed about these metrics can guide financial planning and decision-making.
CBK key rates
CBK Key RatesKey | Rates | Date Updated |
---|---|---|
Central Bank Rate | 13.00% | 03/04/2024 |
Inter-Bank Rate | 13,64% | 23/05/2024 |
CBK Discount Window | 17.00% | 03/04/2024 |
91-Day T-Bill | 15.945% | 27/05/2024 |
REPO | 0.00% | 08/05/2024 |
Inflation Rate | 5% | April,2024 |
Lending Rate | 15.88% | February,2024 |
Savings Rate | 3.33% | February,2024 |
Deposit Rate | 10.32% | February,2024 |
KBRR | 8.9% | 27/06/2016 |
These rates are crucial for understanding the economic environment and making informed financial decisions.
1) Central Bank Rate (CBR)
The Central Bank Rate is the interest rate set by the central bank, which influences all other interest rates in the economy.
It is the rate at which the central bank lends money to commercial banks.
A higher CBR can reduce inflation but may slow economic growth, while a lower CBR can boost economic growth but may increase inflation.
2) Inter-Bank Rate
This is the rate at which banks lend money to each other for short-term needs. The inter-bank rate reflects the liquidity in the banking system.
Higher rates indicate tighter liquidity, while lower rates indicate more available funds.
3) CBK Discount Window
The CBK Discount Window is the facility through which the Central Bank of Kenya (CBK) lends money to commercial banks on a short-term basis to meet liquidity shortages.
The discount window rate is typically higher than the CBR to discourage banks from over-relying on it.
4) 91-Day T-Bill
The 91-Day Treasury Bill rate represents the return on investment for the 91-day treasury bill.
It is a short-term government security that is often used as a benchmark for short-term interest rates in the economy.
5) REPO (Repurchase Agreement)
The REPO rate is the rate at which the central bank lends money to commercial banks against government securities.
This rate helps in controlling liquidity in the market.
A 0.00% REPO rate indicates that there have been no recent repurchase agreements.
6) Inflation Rate
The inflation rate measures the percentage change in the price level of goods and services in the economy over a period, typically annually.
An inflation rate of 5% in April 2024 indicates that the general price level has increased by 5% compared to April 2023.
7) Lending Rate
The lending rate is the average rate at which banks lend to their customers. It reflects the cost of borrowing money from banks.
A higher lending rate can reduce borrowing and spending, while a lower rate can encourage it.
9) Savings Rate
The savings rate is the interest rate paid by banks on savings accounts. A higher savings rate encourages more savings, while a lower rate might discourage it.
9) Deposit Rate
The deposit rate is the interest rate paid by banks on fixed deposits. It reflects the return on investments made by depositors in the form of fixed-term deposits.
10) KBRR (Kenya Bankers Reference Rate)
The KBRR is a reference rate set by the Central Bank of Kenya, which serves as a benchmark for banks to price their loan products.
It was introduced to bring more transparency in the pricing of loans. The KBRR rate listed (8.9%) has not been updated since June 27, 2016.