UPDATE 1-Kenya central bank cuts main lending rate to 12%

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NAIROBI, Oct 8 (Reuters) – Kenya’s central bank cut its benchmark lending rate to 12.00% on Tuesday, from 12.75%, the bank’s monetary policy committee (MPC) said, adding that the move was aimed at boosting credit to the private sector.

In August, the bank cut the rate by 25 basis points, the first in about four years.

Last week, Finance Minister John Mbadi said the central bank rate should start lowering its lending rate due to falling inflation in recent months.

Ahead of the rate decision, umbrella Kenya Bankers’ Association said in a research note on Oct.3 that there was room for the bank “to effect a decisive policy rate cut” to support stronger economic growth by pushing for a recovery in growth of private sector credit.

“The MPC … noted the sharp deceleration in credit to the private sector, and the slowdown in growth in the second quarter of 2024, and concluded that there was scope for a further easing of the monetary policy,” the bank said in a statement. (Reporting by George Obulutsa Editing by Bate Felix)

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