NAIROBI ––Financial news from Nairobi this week revealed that the rate at which banks in Kenya borrow money from each other fell to an eight-year low as liquidity surged in the money market.
The interbank rate in the east African nation dropped by 3.08 percent to 1.71 percent down from 4.79 at the end of last week, the Central Bank of Kenya announced in its weekly brief on Saturday.
According to apex bank data, the preceding time the rate was at such a low point was in March 2011,
“The money market was liquid during the week partly due to government payments which offset tax payments in the week. Commercial banks’ excess reserves stood at 17.3 (171 million U.S. dollars) about the 5.25 percent cash reserves requirement,” says the bank.
The central bank notes that the average number of interbank deals was stable during the week at 20 with volumes traded falling to 100 million dollars from 119 million dollars.