- Decision
- Maintain
- Rate change
- 0 bps
- central bank rate
- 8.75%
The Central Bank of Kenya’s Monetary Policy Committee (MPC) held the Central Bank Rate (CBR) at 8.75%, judging the stance appropriate to keep inflation expectations anchored within the target range and the exchange rate stable. Over the past year, the MPC lowered the CBR in 25-basis-point steps from 9.75% in August 2025 to 8.75% in February 2026. Overall inflation was 6.5% in July, within the 5±2.5% target range, and is expected to remain within range in the near term, assuming the Middle East conflict de-escalates. The economy is projected to grow 4.9% in 2026, while private-sector credit growth remained strong at 10.2% in July. The current account deficit was estimated at 3.0% of GDP in the 12 months to June, while foreign exchange reserves stood at USD 15.249 billion and continued to provide an adequate buffer. The global outlook has weakened as the Middle East conflict pushes up energy and transport costs, alongside trade policy uncertainty and the Russia-Ukraine conflict. The MPC will monitor global oil prices, second-round inflation effects and domestic and global developments, and stands ready to act as necessary.
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.