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June 11, 2025
5mo ago

What CBK’s Rate Cut Means for Your Money Market Fund Returns

What CBK’s Rate Cut Means for Your Money Market Fund Returns

CBK has cut the lending rate by 25 basis points...

✨ Key Highlights

Kenyans investing in Money Market Funds (MMFs) face challenges after the Central Bank of Kenya (CBK) cut the base lending rate by 25 basis points to 9.75%, marking the sixth consecutive reduction since August. This trend is likely to decrease yields from MMFs.

  • The average effective annual yield on MMFs has been between 9% and 11%, but is expected to decline.
  • CBK Governor Kamau Thugge indicated that the interest rate cut aims to stimulate lending and economic activity.
  • The top five MMF schemes manage Kshs. 318.9 billion of the country's CIS market.

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