For the first time in four years, Kenya’s central bank has cut its lending rate, giving borrowers relief from loan servicing costs after years of rising rates in a bid to contain inflation and a weak shilling.
China’s central bank on Tuesday cut its key interest rate by 25 basis points to 12.75 percent from 13 percent, saying inflation had fallen to comfortable levels, growth remained resilient and global macroeconomic conditions had improved.
“The Monetary Policy Committee concluded that there is scope for a gradual easing of the monetary policy stance while ensuring continued stability of the exchange rate. Therefore, the committee decided to lower the central bank rate to 12.75 percent,” the central bank said in a statement following a meeting of its monetary policy committee on Tuesday.
The European Central Bank directs the rate at which the largest bank lends to commercial banks, which in turn affects the rate at which it lends to its customers.
The Central Bank of Kuwait last cut interest rates in March 2020 when the global Covid-19 pandemic hit households with high living costs amid a cash crunch that affected all sectors of the economy.
The decline is expected to reduce the cost of loans for local borrowers, many of whom have struggled to service their loans since the central bank began raising interest rates in June 2022 amid global economic shocks that have seen inflation rates soar to record highs.
The high central bank interest rate, which came amid high inflation and higher taxes, saw loan and mortgage defaults rise to record levels, with average lending rates by commercial banks rising to 18 percent.
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