On December 9, 2025, the Central Bank of Kenya (CBK) announced a reduction in its benchmark lending rate the Central Bank Rate (CBR) by 25 basis points, bringing it down to 9.00 percent from the previous 9.25 percent. This marks the ninth consecutive rate cut, a sequence stretching back over several policy meetings.
According to CBK Governor Kamau Thugge, the Monetary Policy Committee (MPC) made the decision in light of stable inflation, a resilient economy, and improving private-sector credit conditions. In his post meeting remarks, he noted:
“The Committee concluded that there was scope for a further easing of the monetary policy stance … while ensuring inflationary expectations remain firmly anchored and the exchange rate remains stable.”
The move reflects CBK’s continued confidence that inflation will remain contained thanks partly to lower processed food costs, stable energy prices, and a steady exchange rate.
With CBR now at 9.00 percent, borrowers households and businesses alike could soon start seeing lower interest rates on loans and mortgages, provided commercial banks pass on the cuts.
What this means and what to watch
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Potential for cheaper credit: In principle, a lower CBR should reduce loan costs. Mortgage seekers, small-business borrowers, and individuals looking for personal or consumer loans may benefit if banks revise down their rates.
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Transmission matters: The actual benefit hinges on banks adjusting their lending rates. CBK’s rate cut alone does not guarantee cheaper loans the banking sector’s response is key.
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Macro context remains important: CBK underscored that this decision is calibrated against inflation forecasts and currency stability. Any global or domestic shock such as import price volatility could affect the transmission of rate cuts
