Barclays Bank of Kenya has announced it would be cutting its base lending rate by 1.5% effective 1^st August 2012. This comes a day after the Central Bank of Kenya's Monetary Policy Committee cut its lending rate by a similar margin.  Following the decision reached by the Monetary Policy Committee (MPC) of the Central Bank to reduce its lending rate by 150 basis points, Barclays Bank of Kenya has slashed its base lending rate to 21% down from 22.5% in support of the MPC move.

Speaking when he announced the new rate, Barclays Bank of Kenya Regional Managing Director, Adan Mohamed, confirmed that the bank had positively received the decision by the Monetary Policy Committee leading to the early base rate cut. This he said will ensure that the bank passes the benefits to its customers with reduced interest rates on loans.

 “As a responsible banking institution, we have this morning taken an early step to cut our base lending rate to reflect a similar reduction by the Central Bank of Kenya Monetary Policy Committee,” Mohamed explained. "Given the prevailing economic conditions, Barclays supports the decision reached by the MPC which is in the best interest of our customers and the Kenyan economy.”

The MPC announcement came as a relief to borrowers with more banks expected to lower their lending rates in time. The MPC said it reduced the Central Bank Rate owing to stability of the local currency and steady drop in inflation rates. Inflation for the month of June stood at 10.05% down from 12.22% in May 2012.