NAIROBI, Kenya- Kenya’s Central Bank has kept its benchmark interest rate at 8.75 per cent, leaving borrowing costs unchanged as inflation rises and household budgets face renewed pressure.
The Monetary Policy Committee’s decision on Wednesday was the fourth consecutive meeting at which the Central Bank of Kenya (CBK) held the Central Bank Rate (CBR) at the same level.
The rate guides monetary policy and can influence the cost of credit, although it does not automatically determine the interest charged by individual banks.
For borrowers, the decision means the CBK has made no fresh rate cut that could encourage another reduction in lending costs.
Kenyans with existing loans should not expect their repayments to change solely because of Wednesday’s announcement; commercial banks set their own rates and adjust them according to their lending terms and market conditions.
The decision comes as the cost of living remains a concern.
Kenya’s annual inflation rate rose to 6.8 per cent in September, from 6.6 per cent in August, moving closer to the upper end of the government’s target range of 2.5 to 7.5 per cent.
The CBK expects inflation to remain within that range in the near term.
The September figure puts renewed focus on the prices Kenyans pay for everyday goods and services.
The CBK said government measures, including subsidies and a temporary reduction in value-added tax on fuel, were helping to ease inflationary pressures.
The rate has remained at 8.75 per cent since the CBK cut it from 9 per cent in February.
That reduction followed a series of cuts intended to support credit growth; the bank then paused further changes as it monitored inflation risks, including the effect of higher global energy prices.
The committee also raised its 2026 economic growth forecast slightly, to 5 per cent from 4.9 per cent, while identifying the El Niño weather phenomenon as a risk to the outlook.
For Kenya, weather-related disruption could affect agriculture and food prices, adding pressure to the inflation outlook.
The CBK’s latest decision therefore holds the policy rate steady while households and businesses contend with higher prices and wait to see how lending costs and economic conditions evolve.
