MONEY MARKET ANALYSIS
Interbank lending experienced a notable decline during the week, with average traded volumes plunging by 64.8% to KES 6.99bn, compared to KES 19.83bn in the previous week. This coincided with a 27.3% drop in the number of transactions. This decline aligns with the recent trend, where interbank lending frequently alternates between periods of growth and contraction.
Meanwhile, the average interbank rate eased to 9.86% from 10.36%, as the effects of the Central Bank Rate (CBR) cut earlier in the week continue to take hold. This marked the first time since August 2023 that the interbank rate dipped into single digits. The table below summarises the market liquidity indicators:
As has been the trend, interbank rates remain firmly anchored to the Central Bank Rate, with the highs consistently aligned with the upper end and the lows now squarely within the discount window. See the chart below;
