Cash Reserve Ratio (CRR) Requirement

Commercial banks in Kenya are required by law to keep a specified proportion of their total deposits at the Central Bank. This proportion of deposits is called the Cash Reserve Ratio (CRR) Requirement, and when the Central Bank needs to significantly adjust the amount of money in the market, it can increase or decrease the ratio.  The CRR deposits are held in the CBK at no interest. The CRR is currently set at 3.25 percent of the total of a bank’s domestic and foreign currency deposit liabilities. To facilitate commercial banks’ liquidity management, commercial banks are currently required to maintain their CRR based on a daily average level from the 15th of the previous month to the 14th  of the current month and not to fall below a CRR of 2 percent on any day.



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