Nelly
Member
The Central Bank of Kenya is on standby and ready to offer a remedy to businesses should new containment measures announced by President Uhuru Kenyatta prove to be too much.
In a post-Monetary Policy Committee (MPC) briefing on Tuesday, Central Bank Governor Patrick Njoroge noted that things are not looking bad at the moment but should the new measures prove otherwise, remedies such as the loan restructuring could be brought back.
President Uhuru Kenyatta last week announced new stringent containment measures with far-reaching consequences on individuals and businesses to help check the spread of the Corona virus now in its third wave.
The new measures include a partial lockdown of Nairobi, Machakos, Kajiado, Kiambu and Nakuru counties.
Unlike last year when similar measures were announced, the president did not highlight any economic remedy to help workers and businesses that will be affected by the guidelines.
Some of the measures put in place last year which have since been scrapped included tax relief measures that saw taxpayers pay less in Pay as you earn (PAYE), corporate income tax and Valued Added Tax (VAT).
On the monetary side, the Central Bank of Kenya (CBK) reduced its benchmark lending rate from 8.2 per cent to seven per cent, signalling cheap loans to the private sector. The Cash Reserve Ratio (CRR), or the fraction of money that banks have to leave with the financial regulator, was reduced to 4.5 per cent from 5.5 per cent.
The CBK also struck an agreement with banks that would see lenders allow borrowers distressed by the pandemic to reschedule their loans by between six and 12 months. The borrowers would not be charged for the restructuring.
In a post-Monetary Policy Committee (MPC) briefing on Tuesday, Central Bank Governor Patrick Njoroge noted that things are not looking bad at the moment but should the new measures prove otherwise, remedies such as the loan restructuring could be brought back.
President Uhuru Kenyatta last week announced new stringent containment measures with far-reaching consequences on individuals and businesses to help check the spread of the Corona virus now in its third wave.
The new measures include a partial lockdown of Nairobi, Machakos, Kajiado, Kiambu and Nakuru counties.
Unlike last year when similar measures were announced, the president did not highlight any economic remedy to help workers and businesses that will be affected by the guidelines.
Some of the measures put in place last year which have since been scrapped included tax relief measures that saw taxpayers pay less in Pay as you earn (PAYE), corporate income tax and Valued Added Tax (VAT).
On the monetary side, the Central Bank of Kenya (CBK) reduced its benchmark lending rate from 8.2 per cent to seven per cent, signalling cheap loans to the private sector. The Cash Reserve Ratio (CRR), or the fraction of money that banks have to leave with the financial regulator, was reduced to 4.5 per cent from 5.5 per cent.
The CBK also struck an agreement with banks that would see lenders allow borrowers distressed by the pandemic to reschedule their loans by between six and 12 months. The borrowers would not be charged for the restructuring.