Equity Bank has increased its interest rate to 18.24 percent following recent directive by the Central Bank of Kenya to raise the base lending rate.
This is a rise from the 17.5 6 percent that the lender has been offering to its customers.
During its February 6 meeting the CBK's Monetary Policy Committee (MPC) adjusted the Central Bank Rate (CBR) to tackle the rising inflation.
“Following the adjustment of the Central Bank Rate (CBR) from 10.5 percent to 12.5 per cent in December 2023 and from 12.5 percent to 13 percent in February 2024, Equity Bank wishes to notify our customers and the general public, that the Bank shall, effective 20th February 2024, adjust Equity Bank's Reference Rate (EBRR),” the lender said in a notice.
It said the final Interest Rate shall be Equity Bank's Reference Rate (18.24Per cent ) plus a margin (currently at a maximum of 8.5Per cent ) per annum.
Experts had predicted that Kenya’s return to the international bonds market will relieve pressure on local lenders to finance the budget deficit for the current fiscal year, signalling a potential retreat in domestic debt interest rates that have climbed to 18 percent.
The MPC said that all key components of inflation - fuel, food and non-fuel non-food had increased in January.
It noted that the continued, albeit reduced, pressures on the exchange rate and therefore concluded that further action was needed to stabilise prices.