Financial repression still has a major effect on the performance of commercial banks in Kenya. From 1992 the country has had financial liberalization policies, however in the recent past the country adopted financial repression policies like the Interest rate capping law. This research discusses how the Kenyan government has used financially repressive policies since 2010 to 2018 and how it affects the commercial banking sector in Kenya. The specific objectives of this study were to ascertain the effects of interest rates control, domestic government debt, capital controls and reserve and liquidity ratio on the performance of commercial banks in Kenya. The study explored the moderating effect of competition. Bank’s profitability will be considered as dependent variable in this study while interest rate ceiling, domestic government debt, capital controls and reserve and liquidity ratio were considered independent variables, with Competition as the moderator in the study. The study was anchored on three theories namely financial repression theory, public finance theory and public policy theory. The study targeted 36 licensed commercial banks that have been consistently in operation from the year 2010 to 2018 out of the 43 registered ones, leaving out 7 commercial banks which are either acquired by other banks, under receivership or statutory management. The objective of this study was to establish the effects of financial repression policies on the performance of selected commercial banks in Kenya. Secondary data capturing the performance of the commercial banks was obtained from published audited financial statements, CBK publications and journals, National Bureau of Statistics and International Financial Statistics covering the period from 2010 to 2018. The analysis was done in descriptive statistics, checking the measure of central tendency, measure of dispersion and measure of peakedness. The data was analyzed using inferential statistics, Pearson correlation   and the static panel regression model using Stata version 15. The data was subjected to diagnostic tests to test for any violation of regression analysis. The study found that interest rate controls positively and significantly influence performance; government debt was seen to have inverse relationship with performance of commercial banks in Kenya; capital control has direct relationship with performance of commercial banks in Kenya; and reserve ratios had positive influence on performance of commercial banks in Kenya. The study therefore recommends Central bank of Kenya to develop policies that will ensure that interest rate spreads are maintained at its lowest; this can be achieved by removing interest rate barriers which will in turn spur growth for commercial banks. Also, management of commercial banks to ensure that they maintain their implicit interest rate at its minimum in order to lower their operation cost and as a result increases their profits.

Keywords: Financial repression, Capital control, Capital reserve, Commercial banks, Competition, Financial liberations, Financial performance,            Government Debt, Interest rate ceiling.

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