NCBA Bank Kenya has increased the cost of borrowing loans for its customers to 17.50 per cent per annum.
The lending on Kenya Shilling denominated loans was previously 16.50 percent per annum.
Also, USD denominated loan lending rate per annum will increase to 11.75 per cent from 11.0 per cent per annum.
The lender says that it had to hike the rate in response to the changes in the macroeconomic environment.
“The above change will have the following impact on your loan facilities: Fixed Rate Loans: This change will not have any effect on fixed rate loan facilities. Variable Rate Loans: The interest rate on loan facilities priced off the NCBA Bank’s Base lending rate will increase by 1.0 per cent p.a. for KES and by 0.75 per cent p.a. for USD effective May 21, 2024,” stated NCBA Bank.
The move comes after the Central Bank of Kenya (CBK) earlier increased its base lending rate from 12.5 percent to 13 percent in February.
However, the apex bank maintained its base rate at 13 per cent in its latest review amid ease in inflation in the country and the strengthening of the Kenya Shilling against the greenback.
Kenya’s March inflation eased to 5.7 per cent from 6.3 per cent a month prior on the back of a drop in prices of fuel and food.
“The MPC noted that its previous measures have lowered inflation, addressed the exchange rate pressures, and anchored inflationary expectations,” the MPC said.
“The Committee further noted that overall inflation is expected to continue declining in the near term, supported by lower food and fuel prices, and pass-through effects of the recent exchange rate appreciation.”