The adverse economic outlook, projected by the Central Bank Of Kenya due to Conavirus Pandemic has influenced a number of policy actions by the Monetary Policy Committee to curtail the COVID-19 from completely shattering down the economy.
CBK has slashed its base lending rate to 7.25 per cent from 8.25 per cent so as to support credit issuance amidst looming coronavirus distresses. The regulator in a statement had also noted that the Monetary Policy Committee (MPC) had recommended reducing the commercial bank reserve rate (CRR) to 4.25 per cent from 5.25 per cent since 2012, to free up Ksh.35.2 billion in additional liquidity to banks to support lending.
A previous survey by the committee had projected steady growth in the economy, but the novel COVID-19 has distracted the progress. CBK has predicted that Kenya’s 2020 economic growth will decrease, as the demand for exports slows down due to disruptions in the supply chain and domestic production.
“Trade flows have been significantly disrupted, while the continued volatility in international financial markets will worsen this outlook,” the CBK added.
Commercial banks have adhered to the directive of CBK to waiver fees for mobile transactions to help Kenyans transact smoothly in this tough economics times. KCB Bank Kenya and Safaricom Plc committed to supporting customers in financial distress, by availing more funds for lending and cutting transaction costs on mobile as part of the measures to assist as the country grapples with the effects of the Coronavirus pandemic. Customers who had been blacklisted at the Credit Reference Bureaus (CRBs) have been cleared by access these loans during COVID-19 pandemic.