Kenya’s central bank has reduced its benchmark lending rate to 9.25% from 9.50%, marking the eighth consecutive cut, in a bid to stimulate lending by banks to the private sector and support economic activity while keeping inflationary expectations anchored and maintaining exchange rate stability.
The Monetary Policy Committee (MPC) believes this move will augment previous policy actions aimed at boosting economic growth, and notes that private sector credit growth is showing signs of recovery, growing by 2.0% in May 2025, after a prolonged period of decline.
The committee’s decision is also informed by the decline in inflation, which stood at 4.8% in August 2024, and is projected to remain within the target range of 5±2.5% in the medium term.
With this cut, the central bank aims to reduce borrowing costs and incentivize investment, aligning with fiscal consolidation efforts to curb debt vulnerabilities.
