Central Banks leave key lending rates unchanged….

The South African Reserve Bank left the Repo Rate unchanged at 7%, while the Kenyan Central Bank also decided to leave the CBR unchanged at 7.75%.

The difference here only being that South African banks actually benchmark the lending rate based on the Prime Rate which is 10.5% (Repo rate of 7% + 3.5%). While Kenya’s CBR is almost ceremonial and mostly just an indication of what the Central Bank would like banks to do as opposed to a market based benchmark.

The decision by CBK to leave rates unchanged was based on the impact of drought on Kenya’s economic performance and the slow growth in private sector credit.

Here is Prof Ndungu’s press release after the monetary policy meeting yesterday.

Updated on 29th Sept: Download the final press release from the CBK here, which has a detailed outlook of the Kenyan economy from the eyes of the Central bank economists.