Co-operative Bank of Kenya has joined other lenders on the market to reduce their base lending rate. Co-op Bank has announced it will reduce its base lending rates by 1.5%, the same margin Central Bank of Kenya reduced it base lending rate early this month. Co-op Bank will lend to Cooperative societies 21.5% a rate brought down from 23%.

Corporate and Retail customers will now borrow from the bank at 22.5% down from 24%.  Cooperative Bank's announcement comes shortly after Barclays Bank, Bank of Baroda, CFC Stanbic Bank and Prime Bank  also announced they will be slashing down their base lending rates beginning August this year.

KCB Bank group announced in May its intentions to lower base lending rates by close to 3 percentage points. These rates were made effective on the 1st of  June. KCB reduced its average lending rate which had been at 25% to 22% with the group’s mortgage division S&L also dropping its rates on mortgage loans to 19%.

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 with the government targeting single digit inflation rates before the end of the year.