T-bill rates, which are influenced by the levels of government borrowing, look set to be the biggest determinant of loan rates, bankers say.
Dr Njoroge remained optimistic that the Treasury will reduce borrowing, allowing money to flow into the private sector at lower rates to stimulate the economy.
CBK says scrapping of the interest rate cap had removed one of the concerns the Central Bank had about cutting the benchmark.
High-risk borrowers like individuals and small businesses face an increase in loan rates of up to three percentage points following the removal of the legal cap on commercial lending charges, KCB chief executive Joshua Oigara said earlier.
WHY BORROW WITH HIGH LOAN RATES
Kenyans should be urged to get other alternative ways of acquiring money evading this high rising rates that they may not be able to pay back.