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Kenyan Economy Suffers

Kenyan  Economy SuffersKenyan  Economy Suffers

Kenya purchasing managers’ Index survey data indicating a contraction of business activity raise concerns about the impact of recent bank lending regulations, Seeking Alpha reported. Last September, Kenyan policymakers implemented a cap on the rate at which commercial banks can lend at 4% points above the Central Bank rate, which currently stands at 10%. Stanbic Bank PMI data, produced by IHS Markit, reveal that three years of sustained improvements in business conditions came to an end in March. The Banking Amendment Act was reported by companies to have contributed directly to the contraction in Kenyan private sector business conditions. Companies responding to the PMI survey have mentioned the lending rate cap as having a detrimental impact on business in early-2017 as customers faced financial constraints and weaker demand conditions. The PMI data suggest that there is a strong likelihood that GDP could fall in the first quarter of the year.

 

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