CBK lowers benchmark rate to 8.75pc in first sitting

The Central Bank of Kenya (CBK) has lowered its benchmark lending rate in a move aimed at stimulating economic activity and boosting private sector credit.

During Tuesday’s sitting,  the Monetary Policy Committee (MPC) cut the Central Bank Rate by 25 basis points to 8.75pc, citing easing inflation, improving credit growth and a stable

macroeconomic environment. The decision comes ahead of Wednesday’s MPC briefing, with the regulator signalling continued support for growth while keeping inflation firmly anchored.

The latest policy rate cut extends a rate-easing cycle that began in October 2025, as CBK  seeks to lower borrowing costs and stimulate private sector activity.

The regulator says inflation remains well contained, easing to 4.4pc in January, supported by lower food prices and stable energy costs. Economic growth has remained resilient, with the economy expanding by 4.9pc in the third quarter of 2025, driven by a recovery in industry and steady performance in the services sector.

The central bank has also adjusted its policy framework to improve how rate cuts are passed on to borrowers, narrowing the interest rate corridor around the policy rate. This is expected to strengthen the transmission of