The Central Bank of Kenya (CBK) has announced a reduction of its benchmark lending rate from 9.00% to 8.75%, aiming to enhance private sector lending and bolster the economy. This decision comes in light of stable inflation rates and steady economic growth, with the Monetary Policy Committee (MPC) indicating that inflation remains below the midpoint target, as it registered at 4.4% in January 2026.

According to the MPC, the decline in inflation and the resilience of the economy were key factors leading to this lowering of rates. With stable prices in essential areas such as processed food and energy, combined with exchange rate stability, the outlook for inflation is positioned to remain favorable in the near term. The committee is optimistic that this monetary policy adjustment will facilitate more investment and spending within the private sector, essential for driving growth and job creation.

The CBK highlighted the positive economic indicators following the third quarter of 2025, with a real GDP growth of 4.9%, largely fueled by a revival in the industrial sector. This growth trajectory, along with the measures to promote lending, reflects a broader strategy to strengthen the economic foundation of Kenya, ensuring resilience amid global economic uncertainties.