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.
Central Bank of Kenya Holds Policy Rate at 8.75%
The Central Bank of Kenya’s Monetary Policy Committee held the Central Bank Rate at 8.75% in October 2026, citing contained inflation expectations, exchange-rate stability, and an improved growth outlook. Inflation was 6.8% in September, within the 5%±2.5% target range, while the 2026 growth forecast was raised to 5.0% from 4.9%.