The Central Bank of Kenya (CBK) has retained its benchmark lending rate at 8.75 percent for the third consecutive time, keeping borrowing costs for households and businesses unchanged.
The Monetary Policy Committee (MPC), which met on Tuesday, August 11, held the rate steady even as risks from the ongoing conflict in the Middle East cloud the global economic outlook.
Announcing the outcome, CBK Governor Kamau Thugge said the rate was left unchanged to ensure that inflation expectations remain anchored within the target range, and the exchange rate remains stable.
The August hold extends a pattern set earlier in the year. The committee’s decision follows two earlier holds in April and June after a quarter point cut in February brought the Central Bank Rate down from 9 to 8.75 per cent. The MPC said the current stance remains appropriate for keeping inflation expectations anchored and the shilling stable.
Ahead of the meeting, the banking sector had already signaled a preference for continuity. Kenya Bankers had urged the CBK to hold the rate at 8.75 percent, citing stable inflation, credit growth and a stable shilling. That view echoed the outcome of the previous MPC sitting in June, when the committee kept rates unchanged saying inflation remained within the target range and did not warrant tighter monetary policy.
For borrowers, the decision means commercial lending rates are unlikely to shift immediately, offering stability rather than fresh relief at a time when global energy prices and supply chains remain vulnerable to disruption from the conflict. The CBK is expected to continue monitoring developments in the Middle East, oil markets, and domestic price pressures ahead of its next policy review, with any further move likely hinging on how the conflict evolves in the coming months.
