MONEY MARKET ANALYSIS
Liquidity conditions in the money market demonstrated notable stability over the week, with the average lending rate holding steady at 11.31%, unchanged from the previous week. Meanwhile, interbank trading activity softened, with transaction volumes declining by 22.6% to KES 23.14 billion, down from KES 29.92 billion. This dip coincided with a 30.91% reduction in transaction count, reflecting moderated market activity.
The table below summarizes the market liquidity indicators:
Conversely, the discount window remained inactive, while open market operations slowed during the week, with less than KES 10.0bn being injected into the market through reverse repos. Notably, the weighted average interbank rate has stayed closely aligned with the Central Bank Rate (CBR). Interbank rate fluctuations remained well within the interest rate corridor, underscoring the stability and responsiveness of the monetary policy framework.
See the chart below;
