The Central Bank of Kenya (CBK) has maintained its Central Bank Rate (CBR) at 8.75% following its Monetary Policy Committee (MPC) meeting held on October 7, 2026. The decision marks the fourth consecutive meeting at which the regulator has kept the benchmark rate unchanged, as it seeks to maintain price stability while supporting economic growth.According to the CBK, the current monetary policy stance remains appropriate to anchor inflation expectations within the target range and maintain exchange rate stability. The decision comes amid rising global energy prices, geopolitical tensions and uncertainty surrounding the global economic outlook.
Kenya’s annual inflation rate rose to 6.8% in September 2026, up from 6.6% in August. Although inflation remains within the CBK’s target range of 2.5% to 7.5%, the increase places it closer to the upper limit.Higher fuel prices, transport costs and weather-related pressures on food supplies continue to pose risks to the cost of living. Global disruptions to oil supplies have also contributed to elevated energy prices.The CBK expects inflation to remain within its target range in the near term, supported by monetary policy measures, government interventions on fuel prices and a relatively stable exchange rate. However, the regulator will continue monitoring global oil prices and their potential impact on domestic prices.
The decision to maintain the CBR means the benchmark rate remains unchanged, although it does not automatically mean commercial banks will keep their lending rates constant.Average commercial bank lending rates stood at 14.4% in September 2026, compared with 14.3% in August. Meanwhile, private sector credit growth increased to 10.6% in September from 10.3% in August, indicating continued improvement in lending activity.For borrowers, the unchanged policy rate provides some stability in the interest-rate environment. Businesses may benefit from improved access to credit as lending conditions evolve, although the actual cost of borrowing will depend on individual banks’ pricing, credit risk and other factors.
The CBK revised its economic growth forecast for 2026 upwards to 5.0%, from an earlier projection of 4.9%. The improved outlook reflects stronger expected performance in the industry and services sectors.Nevertheless, risks remain, including geopolitical tensions, uncertainty in global trade and adverse weather conditions that could affect agricultural production and food prices.The MPC will continue assessing inflation, exchange rate movements, global energy prices and domestic economic activity before making further policy decisions. Its next meeting is scheduled for December 2026.For now, maintaining the CBR at 8.75% reflects the CBK’s cautious approach to balancing inflation control, financial stability and sustainable economic growth.
