Sharp Daily
No Result
View All Result
Friday, July 25, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home Banking

CBK cuts policy rate by 25 bps to 9.75% from 10.00%

Kevin Cheruiyot by Kevin Cheruiyot
June 12, 2025
in Banking, Business, Economy
Reading Time: 2 mins read

The Central Bank of Kenya (CBK), through its Monetary Policy Committee (MPC), has reduced the benchmark Central Bank Rate (CBR) by 25 basis points to 9.75% from 10.00%, bringing it back into single-digit territory for the first time since May 2023. This marks the sixth consecutive rate cut since August 2024, during which the CBR has steadily declined from 13.00% to 9.75%.

The rate cut signals the CBK’s continued commitment to monetary easing in a bid to stimulate credit growth and support economic recovery, particularly as inflation continues to ease. In May 2025, Kenya’s overall inflation rate dropped to 3.8%, down from 4.1% in April. This figure remains comfortably within the CBK’s target range of 2.5% to 7.5%. A decline in non-core inflation, driven by falling food and energy prices, helped bring down the headline rate, even as core inflation edged slightly higher to 2.8% due to rising costs of processed foods.

The MPC also revised its economic growth projection for 2025, lowering it from 5.4% to 5.2%. The adjustment reflects the anticipated negative impact of increased tariffs on trade, which are expected to have knock-on effects on several key economic sectors. Despite this, the committee remains optimistic, citing the resilience of the services and agricultural sectors, improving export performance, and an expected recovery in private sector credit growth as factors that will underpin economic activity.

In its statement, the MPC emphasized that recent macroeconomic indicators support the current policy stance. The country’s current account deficit narrowed to 1.8% of GDP in the 12 months leading to April 2025, thanks in part to robust export growth and strong remittance inflows from the diaspora. Additionally, Kenya’s foreign exchange reserves stood at USD 10.8 billion, providing 4.75 months’ worth of import cover—well above the statutory minimum of 4.0-months of import cover.

RELATEDPOSTS

Why young professionals should care about pensions

July 23, 2025

How Kenya can reinforce fiscal rules to prevent recurrent budget overruns

July 23, 2025

Private sector credit growth has also shown signs of recovery, rising to 2.0% in May 2025 after months of stagnation. However, the level of non-performing loans (NPLs) remains a concern, having increased slightly to 17.6% in April compared to 17.2% in February. Despite this, banks are reported to be adequately capitalized and well-provisioned against potential losses.

Looking ahead, the CBK expects inflation to remain below the mid-point of its target range in the near term, assuming food and energy prices remain stable. The next MPC meeting is scheduled for August 2025.

Previous Post

SACCOs in Kenya: A homegrown path to wealth creation

Next Post

Maximizing Tax Benefits with CURBS and CPRBS

Kevin Cheruiyot

Kevin Cheruiyot

Related Posts

Economy

How Kenya can reinforce fiscal rules to prevent recurrent budget overruns

July 23, 2025
Economy

Strategies to boost alcohol and tobacco tax revenues

July 16, 2025
Economy

How Kenya is future-proofing its economy against illicit finance

July 9, 2025
Business

Del Monte foods files for bankruptcy in USA

July 3, 2025
Analysis

Lessons from the Kuramo-TransCentury fallout

July 3, 2025
Economy

The mechanics of currency manipulation

June 27, 2025

LATEST STORIES

Why young professionals should care about pensions

July 23, 2025

How Kenya can reinforce fiscal rules to prevent recurrent budget overruns

July 23, 2025
commercial illustrator

Why Kenyan private equity firms should consider continuation funds as an exit strategy

July 23, 2025

Transferring Your Retirement Benefits Between Pension Schemes in Kenya

July 23, 2025

Invest in stability: introducing the Cytonn USD money market fund

July 18, 2025

The Importance of Asset Diversification on Kenyan Pension Funds

July 18, 2025

Park your money where it grows: Why more Kenyans are turning to Cytonn Money Market Fund

July 16, 2025

Strategies to boost alcohol and tobacco tax revenues

July 16, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024