- Decision
- Lower
- Rate change
- 25 bps
- central bank rate
- 9%
The Central Bank of Kenya’s Monetary Policy Committee on 9 December 2025 cut the Central Bank Rate by 25 bp to 9.00 percent, citing room to support activity amid resilient but moderating domestic growth and inflation that eased to 4.5 percent in November—below the 5 ± 2.5 percent target midpoint—on the back of softer processed-food and energy prices and a stable exchange rate. The move extends a year-long easing cycle totalling 225 bp since February, when the CBR stood at 11.25 percent. The MPC noted GDP growth averaged 4.9 percent in H1 and is projected to accelerate to 5.2 percent in 2025 and 5.5 percent in 2026, while private-sector credit growth improved to 6.3 percent in November as lending rates continued to decline. Externally, the current-account deficit widened to 2.2 percent of GDP in the year to October, but FX reserves remain comfortable at USD 12.1 bn (5.25 months of import cover). The committee highlighted resilient global growth, easing but still-elevated core inflation abroad, volatile oil prices and persistent geopolitical tensions as key external risks, and reiterated that it will monitor conditions and stands ready to act, with its next meeting scheduled for February 2026.
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.