Equity Bank on Monday joined other banks to withdraw a notice for an intended increase in interest rates.
The bank said it will no longer effect a raise in interest rates “in response to the market situation.”
Equity Group chief executive James Mwangi said in Nairobi Monday the lowering of Treasury Bill rates by the Central Bank had given the bank room to pass on the benefits to its lenders.
Other banks such as Standard Chartered and Barclays last week announced that they will not increase rates as planned.
The banks are withdrawing the notices but the Central Bank Governor Patrick Njoroge on Thursday last week told them to not only withdraw but reduce current rates.
“We are pleasantry impressed with the speed with which the Government has been able to reduce the Treasury Bill rates,” Dr Mwangi said.
Kenyan banks have traditionally been quick to raise interest rates but very unwilling to cut rates when the situation permits.
The interbank rate which banks use to lend to each other has come to a single digit in weeks, declining to 9.3 per cent. On October 22, the 91-day Treasury Bill peaked at 22.5 per cent, with the rate at which banks were borrowing from each other hitting 25.84 per cent.
SOURCE: BUSINESS DAILY