The Central Bank of Kenya (CBK) has maintained its benchmark lending rate at 8.75 per cent, offering cautious relief to borrowers while signaling concern over mounting global economic uncertainties.
In a decision announced after the Monetary Policy Committee (MPC) meeting held on April 8, 2026, the regulator said the move was aimed at anchoring inflation and safeguarding macroeconomic stability amid external shocks.
“The Monetary Policy Committee decided to maintain the Central Bank Rate (CBR) at 8.75 per cent,” CBK said in a statement, noting that inflation remains within the target range, supported by stable core inflation, favourable weather conditions, and a steady exchange rate.
CBK Governor Kamau Thugge emphasized that while domestic indicators remain stable, global developments -particularly the ongoing conflict in the Middle East – pose significant risks. The conflict has disrupted supply chains and driven up global energy prices, creating uncertainty for both advanced and emerging economies.
Kenya’s inflation stood at 4.4 per cent in March 2026, slightly up from 4.3 per cent in February, but still within the CBK’s preferred band of 5±2.5 per cent. Core inflation remained contained at 2.1 per cent, largely due to lower prices of key food items such as sugar and maize flour. However, non-core inflation rose to 10.8 per cent, driven by increased costs of vegetables like tomatoes and Irish potatoes.
Despite these pressures, the CBK projects that inflation will remain within target in the near term, supported by stable food supply and exchange rate resilience.
On the broader economic front, Kenya’s economy continues to show resilience. The country recorded a GDP growth of 5.0 per cent in 2025, up from 4.7 per cent in 2024, driven by recovery in the industrial sector, steady agricultural output, and a robust services sector. Growth for 2026 is now projected at 5.3 per cent, slightly lower than earlier forecasts due to emerging global risks.
However, concerns persist within the banking sector, with non-performing loans rising marginally to 15.6 per cent. At the same time, private sector credit growth has improved, indicating recovering demand as lending rates gradually ease.
The CBK reiterated its readiness to adjust policy if conditions change, particularly in response to global shocks and inflationary pressures linked to rising oil prices.
For now, the decision signals a balancing act – supporting economic growth while maintaining vigilance in an increasingly volatile global environment.
