Kenya Central Bank raises discount window rate to 13.87pc

NAIROBI: Kenya's central bank raised on Tuesday its discount window rate to 13.87 percent from 11.34 percent a day before, a posting on its website showed, following a revision of its overnight lending rules last week.

Central Bank of Kenya said on Friday that commercial banks seeking to borrow from the overnight window would be charged at a higher rate based on a formula taking into account the central bank rate (CBR), plus the previous day's average interbank rate, minus the central bank's rate of 6.25 percent plus a penalty of three percentage points.

At close of Monday trade the weighted average interbank lending rate stood at 10.87 percent, from 8.34 percent on Friday.

Tuesday's rise in the discount window rate was at a much slower pace than Monday's, when it rose from Friday's 6.25 percent before the rule was introduced.

Copyright Reuters, 2010