High liquidity seen holding policy rate
Wednesday, June 24, 2020 0:01
By CHARLES MWANIKI
The Central Bank of Kenya building in Nairobi.
FILE PHOTO | NMG
The high liquidity in the local money market is likely to push the Central Bank of Kenya (CBK) to retain the base lending rate at seven percent, analysts say.
“On the monetary front, the Central Bank may keep rates on hold, as it struggles with excess liquidity for now.
Normally, high liquidity in the market would see a push for some tightening, either in the base rate or raising the cash reserve ratio for banks.
On the other hand, central banks ease their policy rate to increase liquidity, which helps to spur growth by creating demand in the economy.
