Kenya Holds Key Policy Rate for 2nd Meeting

2026-06-09 14:53 By Luisa Carvalho 1 min. read

The Central Bank of Kenya left its benchmark interest rate at 8.75% on June 9, 2026, a second straight hold, saying policy remains appropriate to anchor inflation expectations and support exchange rate stability.

Inflation rose for a third month to 6.7% in May, the highest since January 2024, driven by higher energy costs but remaining within the 5±2.5% target band.

It is expected to stay within target in the near term, assuming the de-escalation of the Middle East conflict.

The central bank said this outlook will be supported by a combination of monetary policy actions, government interventions including fuel VAT reductions and subsidies, favorable weather conditions supporting stable food prices, and exchange rate stability.

Meanwhile, leading indicators point to resilient activity in Q1 2026.

The economy is projected to grow 4.9%, down from a previous estimate of 5.3%, reflecting continued uncertainty posed by the Middle East conflict and trade policy developments.



News Stream
Kenya Holds Key Policy Rate for 2nd Meeting
The Central Bank of Kenya left its benchmark interest rate at 8.75% on June 9, 2026, a second straight hold, saying policy remains appropriate to anchor inflation expectations and support exchange rate stability. Inflation rose for a third month to 6.7% in May, the highest since January 2024, driven by higher energy costs but remaining within the 5±2.5% target band. It is expected to stay within target in the near term, assuming the de-escalation of the Middle East conflict. The central bank said this outlook will be supported by a combination of monetary policy actions, government interventions including fuel VAT reductions and subsidies, favorable weather conditions supporting stable food prices, and exchange rate stability. Meanwhile, leading indicators point to resilient activity in Q1 2026. The economy is projected to grow 4.9%, down from a previous estimate of 5.3%, reflecting continued uncertainty posed by the Middle East conflict and trade policy developments.
2026-06-09
Kenya Halts Rate-Cut Cycle
The Central Bank of Kenya held its benchmark interest rate at 8.75% on April 8, 2026, pausing after ten consecutive rate cuts since August 2024, totaling 425 basis points. The Committee said the current stance remains appropriate to keep inflation expectations anchored and the exchange rate stable, noting risks from recent oil price increases. Governor Kamau Thugge noted that the conflict in the Middle East has disrupted global supply chains, driving energy prices sharply higher and increasing risks to the global economic outlook. The annual inflation rate in Kenya ticked higher to 4.4% in March from a seven-month low of 4.3% in February but remains below the 5% midpoint of the central bank’s target range. It is expected to remain within the target range for the short term. Meanwhile, the central bank cut its economic growth outlook to 5.3% from an earlier projection of 5.5%, reflecting the emerging risks from the conflict.
2026-04-08
Kenya Delivers 10th 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.
2026-02-10