The Central Bank of Kenya (CBK) has left its benchmark rate unchanged. The Monetary Policy Committee (MPC) retained the Central Bank Rate (CBR) at 8.75 percent at its October 7, 2026 meeting. It is the fourth consecutive meeting at which the rate has stayed put, which means borrowing costs remain unchanged.
The pause follows a period of easing. The MPC lowered the CBR by 25 basis points to 8.75 percent from 9.00 percent at its February 10, 2026 meeting, and the CBK has held it there since. It kept the rate steady in April and June. It did so again in August, citing a positive outlook on economic growth. The October meeting extends that run.
In its statement, the MPC said the current stance remains appropriate to keep inflation expectations anchored within the target range and the exchange rate stable. Inflation is edging up but remains inside the CBK’s target band of 2.5 to 7.5 percent. Annual inflation rose to 6.8 percent in September from 6.6 percent in August. The central bank also pointed to risks from abroad. It warned that the Middle East conflict could keep global energy costs high, weaken global growth and add pressure on prices, and that higher global oil prices could weigh on Kenya’s economy.
The domestic picture is somewhat brighter. The CBK raised its 2026 economic growth forecast to 5.0 percent from 4.9 percent. Lending to businesses and households is also recovering, with private sector credit growth rising to 10.6 percent in September from 10.3 percent in August. Average commercial bank lending rates stood at 14.4 percent, down from 17.2 percent in November 2024.
For borrowers, an unchanged CBR means no immediate change in the central bank’s benchmark policy rate. The rates individual borrowers pay still depend on their lenders and loan agreements, so those with variable rate loans linked to the benchmark should not expect an adjustment as a direct result of this decision. After the August decision, one view was that the CBK recognizes the inflation risk but does not yet believe it warrants sacrificing recovery. The October decision follows the same logic, with the CBK keeping the rate steady while leaving its options open if inflationary pressures intensify.
Future moves will likely hinge on three things: the path of global oil prices, whether domestic inflation stays within the target range, and whether credit growth keeps strengthening. For now, the CBK has chosen stability over change.
