The Monetary Policy Committee of the Central Bank of Kenya cut the Central Bank Rate by 25 bp to 8.75 percent, citing headline inflation at 4.4 percent in January—below the 5 ± 2.5 percent target band—and a need to further support credit expansion and growth while keeping inflation expectations and the exchange rate anchored. Including this move, the CBR has been reduced by a cumulative 200 bp since February 2025. To reinforce transmission, the Committee narrowed the policy corridor to ±50 bp around the CBR and lowered the Discount Window rate to the corridor’s 50 bp upper bound. Core inflation measured 2.2 percent, real GDP grew 4.9 percent in Q3 2025 and is projected to rise to 5.5 percent in 2026, while private-sector credit growth accelerated to 6.4 percent and average lending rates eased to 14.8 percent in January. Externally, the 2025 current-account deficit is estimated at 2.4 percent of GDP and reserves stand at USD 12.46 bn (5.37 months of import cover). The MPC observed resilient global growth of 3.3 percent alongside moderating global inflation but flagged weak demand and heightened geopolitical tensions as key risks, and it reiterated its readiness to act at the April 2026 meeting.
Central Bank of Kenya 2026-02-10
Kenya cuts Central Bank Rate 25 bp to 8.75 %
Central Bank of Kenya’s Monetary Policy Committee cut the Central Bank Rate by 25 bp to 8.75 %, narrowed the corridor to ±50 bp and set the Discount Window rate at the upper band, citing January headline inflation of 4.4 % below the 5 ± 2.5 % target and the need to support credit growth. The move brings cumulative easing since Feb 2025 to 200 bp and the MPC signalled potential further action at its April 2026 meeting.