The increase in part is motivated by the need to align our capital requirements with those of our partners in the EAC. Kenya will raise its minimum capital requirement to Ksh 1 billion, which is nearly $ million, by 2012. Other aspects of bank regulations will also need to be harmonised, including permissible activities, restrictions on loan concentrations and liquidity requirements.
In addition to such policy measures being steadily pursued by the government, the Bank's initiatives to maintain highly accommodative financial conditions and ensure the overcoming of deflation will continue to foster positive developments among firms. In my view, this will lead to improvement in productivity and ultimately to a rise in the potential growth rate.