A Kenyan high court ruled as "unconstitutional" a cap on commercial bank interest rates, Reuters reported March 14, citing a tweet by the country's central bank.

The court argued that the cap only punished banks and not customers for violating the law, and suspended the implementation of the cap for 12 months to allow lawmakers to re-examine the law, the report added.

The interest rate cap, implemented in 2016, stands at 4 percentage points above the central bank rate. Banks have argued that the cap has forced them to cut back on loans to high-risk groups, while the Central Bank of Kenya said the cap has negatively impacted loans to the small and medium-sized enterprises sector, Reuters noted.

Kenyan lawmakers voted against a proposal to repeal the cap in August 2018.

This development follows the Kenyan central bank's decision to keep policy rates steady amid concerns of slowing economic growth worldwide.