Kenyan rates plunge after Reuters scoop

Reuters broke news exclusively of a cut of nearly 12 percentage points in a key Kenyan central bank lending rate which sent interbank lending rates tumbling. Reuters got hold of an internal central bank report on August 30 which showed that the discount window rate, which the central bank uses to lend to commercial banks during funding shortages, had tumbled to 19.83 percent from 31.4 percent. Interbank lending rates followed suit and fell from nearly 28 percent to just over 19 percent. The change in the discount rate was a result of the central bank using a new formula to calculate it, under pressure to ease a funding squeeze in money markets. Bloomberg picked up the story from Reuters.