Kenya’s central bank has lowered its benchmark interest rate for the tenth straight meeting, underscoring an aggressive push to stimulate lending and support economic activity as inflation remains subdued.
The Central Bank of Kenya (CBK) on Tuesday cut its benchmark lending rate to 8.75 percent from 9.00 percent, following a meeting of its Monetary Policy Committee (MPC). The decision is aimed at reinforcing earlier measures intended to boost private sector credit growth, which policymakers see as critical to sustaining economic momentum.
In a statement, the MPC said the move reflects improved inflation dynamics and a relatively stable macroeconomic environment, giving the central bank room to maintain an accommodative monetary stance. Kenya’s inflation has eased in recent months, staying within the government’s target range, helped by lower food prices and a stronger shilling.
The central bank noted that despite earlier rate cuts, lending to the private sector has remained weaker than desired, partly due to risk aversion among banks and lingering effects of tight financial conditions seen in previous years. By reducing the policy rate further, the CBK hopes to lower borrowing costs and encourage banks to extend more credit to businesses and households.
“The decision seeks to strengthen the transmission of previous monetary easing measures and support economic recovery,” the MPC said, adding that it will continue to closely monitor global and domestic risks.
Kenya’s economy has been navigating multiple pressures, including elevated public debt, fiscal consolidation efforts, and uncertainty in global financial markets. However, authorities remain cautiously optimistic that improved credit conditions will support growth in key sectors such as manufacturing, agriculture, and services.
The CBK also reiterated its commitment to price stability, noting that it stands ready to take further action if inflationary pressures re-emerge or if external shocks threaten economic stability.
With the latest cut, Kenya now has one of the lowest benchmark rates in the region, highlighting the central bank’s determination to prioritise growth and private sector activity as the country seeks to consolidate its economic recovery.
