- Decision
- Lower
- Rate change
- 25 bps
- central bank rate
- 9.25%
The Monetary Policy Committee of the Central Bank of Kenya cut the Central Bank Rate by 25 bp to 9.25 % at its 7 October 2025 meeting, judging that sub-target inflation and resilient growth left room to support credit expansion without jeopardising price or exchange-rate stability. This marks the fifth consecutive easing, extending the cumulative reduction since February 2025 to 175 bp from 10.75 % then. Inflation held at 4.6 % in September, below the 5 ± 2.5 % target midpoint, with core at 2.9 % and headline seen staying subdued on stable energy costs and a firm shilling. Real GDP grew 5.0 % y/y in Q2 2025, and the bank projects 5.2 % growth in 2025 and 5.5 % in 2026; private-sector credit growth accelerated to 5.0 % in September as average lending rates fell to 15.1 %. The current-account deficit widened to 2.1 % of GDP in the 12 months to August but is forecast to narrow to 1.7 % in 2025, while FX reserves remain adequate at USD 10.8 bn (4.7 months import cover). Globally, solid 2025 growth is expected to moderate next year amid higher tariffs and geopolitical tensions, with declining energy prices set to ease worldwide inflation. The Committee highlighted the forthcoming risk-based credit-pricing framework, reiterated vigilance over domestic and external conditions, and said it is ready to act again, with the next review scheduled for December 2025.
Rate evolution
From June 2025 to February 2026, the Central Bank of Kenya cut the Central Bank Rate by a cumulative 125 basis points to 8.75 percent from 10.00 percent in an uninterrupted easing cycle. The Monetary Policy Committee repeatedly judged there was scope to ease because inflation remained below the midpoint of the 5±2.5 percent target range and was expected to stay there in the near term, allowing it to support lending and economic activity while keeping inflation expectations firmly anchored and the exchange rate stable. Decisions were also backed by resilient growth, falling lending rates, a steady recovery in private sector credit, adequate foreign exchange reserves and a stable banking sector, even as surveys continued to cite subdued consumer demand and high business costs. The Committee cut the CBR to 9.00 percent in December and 8.75 percent in February as inflation stayed contained and credit strengthened, while flagging food-price pressures, adverse weather, trade-policy uncertainty and geopolitical tensions.
On August 11, 2026, the Committee held the CBR at 8.75 percent, judging the stance appropriate to keep inflation expectations anchored within the target range and the exchange rate stable. Overall inflation was broadly stable at 6.5 percent in July and was expected to remain within the target range in the near term, while the Committee noted stronger economic growth and private sector credit but said it would monitor global oil prices, potential second-round effects on inflation and other global and domestic developments.