Eyes on CBK as MPC meets in era of interest capping

The Central Bank of Kenya’s monetary policy committee (MPC) will on Tuesday hold its bi monthly meeting for the first time since a law capping interest rates came into effect.

Analysts said it would be interesting what policy decision is made by the rate setting committee.

This after the CBK announced that the interest rates would be pegged on the central bank rate (CBR) currently at set at 10.5 percent.

This has raised concern over the effectiveness of the central bank’s transmission of monetary policy.

The banking regulator has traditionally used the CBR to keep inflation in check as well as support the shilling in the exchange market.