MONEY MARKET ANALYSIS
Interbank lending fell for the third consecutive week, with average traded volumes declining 23.6% to KES 7.49bn from KES 9.80bn in the previous week, despite a 13.3% rise the number of transactions. Meanwhile, the average interbank rate eased further to 9.85% from 9.91%, reflecting ongoing policy interventions by the CBK through open market operations. The table below summarizes the market liquidity indicators:
May 2025 has so far carried a subdued tone, with average interbank lending trailing below historical norms. The restrained peer-to-peer activity suggests that market players are holding onto cash, despite the recent clearance of May maturities. See the chart below:
Interbank rates remain firmly anchored to the Central Bank Rate, with the highs slightly above the policy rate and the lows closer to the rate but squarely within the corridor. See the chart below;
