NAIROBI, Kenya — The Central Bank of Kenya has lowered the Central Bank Rate by 25 basis points to 8.75pc, signalling continued monetary easing aimed at stimulating private sector lending and supporting economic growth.
The decision was made by the Monetary Policy Committee during its meeting held on February 10, 2026, against a backdrop of easing inflation and steady economic performance.
“The Monetary Policy Committee decided to lower the Central Bank Rate by 25 basis points to 8.75 per cent from 9.00pc,” the CBK said in a statement.
According to the bank, inflation remains well anchored within the government’s target range. Overall inflation eased to 4.4 per cent in January 2026 from 4.5pc in December 2025, staying below the midpoint of the 5pc target, with a margin of plus or minus 2.5pc.
Non-core inflation, driven mainly by food prices, declined to 10.3pc, reflecting improved food supply and favourable weather conditions. Core inflation, which excludes food and fuel, edged up slightly to 2.2pc, largely due to higher prices of some processed food items.
The MPC said inflation is expected to remain stable in the near term, supported by exchange rate stability, moderate energy prices, and favourable weather.
The rate cut comes as Kenya’s economy continues to show resilience. Real GDP growth is estimated at 5.0 P.c in 2025, driven by strong performance in the industrial and services sectors. Agriculture is projected to recover gradually, provided weather conditions remain favourable.
The CBK forecasts growth of 5.5 P.c in 2026 and 5.6 P.c in 2027, supported by sustained private sector activity and a pick-up in industrial output.
Private sector credit growth has also improved. Lending rose to 6.4 Pc in January 2026, with increased demand from the building and construction sector, trade, and consumer durables. Average commercial bank lending rates declined to 14.8 Pc, down from 15.0 Pc in October 2025, a trend the CBK expects to strengthen following the latest rate cut.
To improve the effectiveness of monetary policy transmission, the MPC approved a narrowing of the interest rate corridor from plus or minus 75 basis points to plus or minus 50 basis points around the CBR. The Discount Window rate was also adjusted to 50 basis points above the benchmark rate.
The central bank further noted that full implementation of the Risk-Based Credit Pricing Model in March 2026 will enhance transparency in loan pricing and support stronger credit growth.
The decision marks the latest in a series of rate cuts by the CBK, following a reduction to 9.0 per cent in December 2025, part of a sustained effort to lower borrowing costs and encourage lending to businesses and households.
The MPC said it will continue to closely monitor domestic and global developments to ensure inflation remains contained and exchange rate stability is maintained. The next MPC meeting is scheduled for April 2026.
