The Central Bank of Kenya (CBK) has held its benchmark lending rate steady for the second meeting in a row, as the regulator opts for caution amid a turbulent global economic environment.
The Monetary Policy Committee (MPC) decided to maintain the Central Bank Rate (CBR) at 8.75 per cent during its meeting held on June 9, 2026, with the MPC stating that the current monetary policy stance remains appropriate despite growing risks to both the domestic and global economy.
The decision marks a significant shift from an aggressive easing cycle that saw CBK cut its benchmark rate from a peak of 13.0% in early 2024 all the way down to 8.75% by February 2026 a reduction achieved across ten consecutive meetings over approximately 20 months. The April and June holds now represent a deliberate policy pause.
For borrowers, the immediate practical impact is stability. Commercial banks are unlikely to significantly increase interest rates on existing and new loans in the short term, easing pressure on households already contending with higher fuel, transport, and food costs.
The MPC’s decision is underpinned by broadly favourable domestic conditions. Overall inflation remained below the midpoint of the target range, supported by stable core inflation, favourable weather conditions, and a broadly stable exchange rate. Core inflation remained steady at 2.1 per cent, partly because prices of processed staples such as sugar and maize flour have declined.
Globally, the MPC flagged persistent headwinds. The committee warned that weak global demand, trade policy uncertainties, and geopolitical tensions in regions such as the Middle East and Ukraine continue to cloud the outlook factors that help explain the regulator’s decision to hold rather than cut further.
CBK Governor and MPC chair Kamau Thugge had previously stated that any policy moves are intended to support lending to the private sector and stimulate economic activity while keeping inflation expectations firmly anchored. That balancing act appears to be the guiding principle behind the current pause.
With inflation in check and growth on a solid footing, Kenyans should watch for whether the CBK resumes its easing path later in the year or holds steady as global uncertainties persist.
