Kenyans investing in Money Market Funds (MMFs) have been dealt a blow after the Central Bank of Kenya (CBK) lowered the base lending rate for the sixth successive time since August last year.
CBK, in its latest Monetary Policy Committee (MPC) report published on Tuesday, June 10, announced that it had reduced the base lending rate by 25 basis points to 9.75 per cent from 10.00 per cent.
A move to ease the monetary policy stance triggers a chain reaction in the financial system.
While this move is typically celebrated for encouraging borrowing and investment, it also leads to a slight dip in returns for low-risk, fixed-income instruments, precisely where MMFs invest.
