Tanzania Keeps Close Eye on Kenya’s Interest Rates Cap Impact
Thursday, September 1, 2016
The Bank of Tanzania (BoT) says it is closely watching the outcome of the decision by Kenya to introduce caps on loan interest rates before considering a move back home.
BoT governor Benno Ndulu told The Citizen over the weekend that it would be too early to comment because of possible adverse outcomes to the low-income earners.
Last Wednesday Kenya became the only country in the region to introduce a law that caps bank interest rates at 4 per cent above the Central Bank of Kenya benchmark rate, currently standing at 10.5 per cent.
The law will regulate applicable rates to bank loans and deposits thereby capping the interest that the financial institutions can charge on loans and deposits. Prof Ndulu told The Citizen that Tanzania would have to wait to see how the Kenyan experience turns out.