The Central Bank of Kenya (CBK) has reduced its benchmark lending rate to 8.75 per cent from 9 per cent, citing declining inflationary pressures. The decision was taken on Tuesday during a meeting of the Monetary Policy Committee (MPC) chaired by CBK Governor Kamau Thugge.
In a statement issued in Nairobi, Thugge said there was room to ease the monetary policy stance through a 25 basis point reduction in the Central Bank Rate. He explained that the move is intended to reinforce earlier measures designed to stimulate private sector lending and support economic activity,
while maintaining stable inflation expectations and exchange rate stability.
Kenya’s overall inflation fell to 4.4 per cent in January 2026, down slightly from 4.5 per cent in December 2025. The rate remains below the mid-point of the CBK’s target range of 2.5 to 7.5 per cent.
The MPC indicated it would continue to monitor the effects of the policy adjustment, as well as global and domestic economic developments, and stands ready to take further action in line with its mandate.