KBRR is computed as an average of the Central Bank Rate (CBR) and a two-month moving average of the 91-day Treasury bill rate, and announced by MPC. The CBR reflects the monetary policy direction consistent with inflation profile, while the 91-day Treasury bill rate reflects the return on short term risk free assets.
Prior to this every bank had its own base rate, whose composition was not known to the borrowers. This now opens a transparency window for borrowers who can compare and negotiate lending rates across banks. Banks are now required to explain to their customers and the Central Bank the composition of the premium (k) they charge above KBRR.