Kenya Delivers 7th Straight Rate Cut

Kenya's central bank trimmed its benchmark interest rate by 25 bps to 8.75% on February 10, 2026, marking its tenth consecutive rate cut following a similar move in December. Policymakers said the decision builds on previous policy actions designed to stimulate private-sector lending and support economic activity, while safeguarding price stability and a stable exchange rate. The annual inflation rate in Kenya eased to a six-month low of 4.4% in January 2026, from 4.5% in December, staying below the 5% midpoint of the central bank’s target range. It is expected to remain below the midpoint of the target range in the near term. Meanwhile, the central bank noted that Kenya’s economy remained resilient in Q3 2025, with the GDP rising 4.9%. Full-year GDP growth is now projected at 5% for 2025, down from the previous 5.2% estimate because of slower agriculture, and is expected to accelerate to 5.5% in 2026 and 5.6% in 2027, supported by services and industry.

The Central Bank of Kenya slashed its benchmark interest rate by 25 bps to 9% in its December 2025 meeting, marking the ninth consecutive rate cut. Governor Kamau Thugge said the decision “will augment the previous policy actions aimed at stimulating lending by banks to the private sector and supporting economic activity”. "The cut will also ensure inflation expectations stay firmly anchored, and the exchange rate remains stable", he added. The annual inflation rate in Kenya eased to 4.5% in November from 4.6% in each of the previous two months. Inflation has been below the 5% midpoint of the central bank’s target band since mid-2024. It is expected to remain below that level in the near term, thanks to lower processed food prices, stable energy costs, and continued exchange rate stability.

The central bank of Kenya cut its Central Bank Rate by 25bps to 9.25% in its October 2025 meeting, an eighth consecutive rate cut since the rate was at a 12-year high in April of 2024 to extend efforts of supporting credit and economic growth. The Bank's Governor Kamau Thugge noted that the less-restrictive policy would continue to stimulate the economy, estimating the Kenya's GDP would expand by 5.2% this year and 5.5% the next, compared to the 4.7% growth rate from last year. The cut was also warranted by softer concerns of higher inflation as Thugge claimed inflation expectations remained stable. Additionally, the softer dollar aided the anchoring of the shilling and supported flows from Kenya's recent $1.5 billion eurobond.