The Star (Nairobi)

1 September 2014

Kenya: Eurobond Cash to Help Cut Interest Rates

Interest rates will begin to decline drastically once the government starts spending money raised through the Eurobond two month ago, Trans National Bank CEO Sammy Langat has said.

Langat said increased government spending will raise the amount of money in circulation and hence reduce the interest rates.

"We expect that to happen soon and help to ease the interest rates," said Langat. He was speaking in Eldoret when the bank opened its refurbished branch in the area along with a new branch in Iten town.

The Euro bond was Kenya's first effort to raise capital from European and American investors. The bond was oversubscribed by over 400 per cent.

The country sought to raise $1.5bn through the Eurobond, but eventually raised $2bn after it attracted bids four times its initial target.

US investors bought about two thirds of the bonds, with British investors took a quarter.

Langat said the government was a major catalyst in helping to control the interest rates.

The bank now has 18 branches and has planned to open more in efforts to be available to customers in all the counties.

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