Equity Bank Heeds to CBK Governor’s Call & cancels Interest Rates hike notice

Equity Bank held a Media and Investor Briefing this morning. The major highlight was that the bank has nullified its earlier notice given to customers about increase in lending rates. The CEO Dr. James Mwangi said the move was triggered by the recent significant slide in Government’s T-Bill.

Last week, the Central Bank Governor said that it expected the commercial banks to lower their rates in line with the fall. Yields on Kenyan T-bills have fallen in the past few weeks. The 91-day Treasury bill dropped below 10 percent last week after climbing above 20 percent in October. Mwangi said that the Kenyan Economy is doing well contrary to what is in the media. He added that stabilization of the exchange rates, with a bias on a fairly weaker shilling which should boost exports and help narrow the current account deficit. With regards to interest rates, the bank expects the weighted average lending rate to come in at about 17.8-18.0%, down from the 20.0% projected two months ago due to higher T-Bill rates. A decline in interest rates is expected to increase loan uptake, reduce the default risk as well as boost investments, ultimately stimulating economic growth