Nothing will happen, the base(s) is already there and banks have already lowered their interest rates to base rate that favours them, while the consumer via Omtata have gone to the courts to ask for the rate that favours the consumer.

The courts will likely find nothing wrong with the law and only direct CBK to expressly decide which rate is the right base rate to use, either way, the borrower can only gain

We should let the system work.

Banks getting squeezed further with the M- bond option. Now wanjiku will have choice of where to put her money. Equity bank at 20 coming soon to a market near you.

Maximum interest on loans could fall from the prevailing 14.5 per cent in the near term if banks continue basing their pricing on the Central Bank Rate.

Analysts are projecting the CBR, reviewed after every two months, to come down by about 100 basis points between this month and end of next year.

Lenders have elected to apply the 10.5 per cent CBR as the base, exploiting a clarity loophole in the Banking (Amendment) Act 2016, operationalised on August 31, requiring banks to comply by September 14.

Holding or reducing the CBR will result in borrowers paying 14.5 per cent or less in interest, pending further guidelines from the Central Bank.

Panelists at Barcelona-based FocusEconomics, a global economic data analysis firm, see the CBK’s Monetary Policy Committee shaving the key lending rate by a cumulative 58 basis points during their two upcoming meetings on September 20 and later in November. The panelists, who analyse forecasts from 11 influential global firms, further project a marginal 18 basis-point cut on the CBR next year.

“FocusEconomics Consensus Forecast panelists expect the bank rate to end 2016 at 9.92 per cent. For 2017, panelists project the bank rate to end the year at 9.74 per cent,” they said in their outlook for September.

Economic researchers at Standard Chartered Bank, just like FocusEconomics, have based their outlook for up to 150 basis points easing on stable inflation. They say, inflation which dropped to 6.26 from 6.39 per cent month-on-month in August, was likely to stay within the 2.5 and 7.5 per cent range.

“We still see a comfortable inflation outlook,” London-based financial analyst Aly Khan said following the July 25 MPC policy stance. “We still expect the CBR to end 2016 at 9.50 per cent as we did before. Medium-term fiscal consolidation plans could favour a further 50bps of easing in 2017.”

Analysts at Cytonn Investments, however, see the MPC keeping the CBR steady at least during this month’s meeting. “They will hold it so they can see the changes simmering into the economy. I don’t expect a rate cut,” Cytonn’s chief investment officer Elizabeth Nkukuu said

Sounds ominous. Anyone know what the changes are?

Levies kabambe!

For those who get paid salaries etc through savings accounts I believe the bank want to convert these accounts to some non interest bearing accounts to avoid paying the 7..XX% interest

https://twitter.com/alla...atus/774267555708039168

CBA breaks rank with other banks, becomes 1st lender to cap interest rate using Kenya Bankers Reference Rate at 12.9%

Actual notice:
https://twitter.com/CBA_...tatus/774265831861657600

Irony of using KBRR is that because it's lower, banks move to lending to govt. So tbills drop, and because tbills make up KBRR, KBRR drops further. CBK wont even have to change CBR.

Interesting times ahead.

The race to the bottom continues. Those banks unable to adapt to change will perish leaving only the most cost efficient surviving.

Disaster in the making