- 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% in October 2026, judging the stance appropriate to keep inflation expectations within the target range and the exchange rate stable as the growth outlook improved. Over the past year, the CBR fell from 9.50% to 8.75% through 25-basis-point cuts in October and December 2025 and February 2026, before being held in August. Overall inflation rose to 6.8% in September but remained within the 5%±2.5% target range and is expected to stay within the range in the near term, while the 2026 growth forecast was raised to 5.0% from 4.9%, reflecting stronger industry and services. Private-sector credit growth remained strong at 10.6% in September. The current account deficit is projected at 3.2% of GDP in 2026 and is expected to be more than fully financed, while foreign exchange reserves stood at USD 14.70 billion, equivalent to 5.9 months of import cover. Globally, higher energy and food prices are expected to raise inflation and moderate growth, with Middle East and Russia-Ukraine conflicts and trade policy uncertainty posing risks. The MPC will monitor global oil prices and potential second-round inflation effects 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 (CBR) 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.
On August 11, 2026, the Committee held the CBR at 8.75 percent, judging the stance appropriate as 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 noting stronger economic growth and private sector credit. On October 7, it again held the CBR at 8.75 percent, concluding that the stance remained appropriate to anchor inflation expectations within the target range and keep the exchange rate stable as overall inflation rose to 6.8 percent in September from 6.6 percent in August but remained within the target range. The Committee revised projected economic growth for 2026 to 5.0 percent from 4.9 percent and noted strong private sector credit growth, while continuing to monitor global oil prices, potential second-round effects on inflation and other global and domestic developments.