NAIROBI, Kenya — The Central Bank of Kenya (CBK) has lowered its benchmark lending rate by 25 basis points to 8.75 per cent, in a move aimed at boosting private-sector credit and supporting sustained economic growth.
The decision was made by the Monetary Policy Committee (MPC) at its meeting on February 10, 2026, against a backdrop of easing inflation and steady economic performance.
“The Monetary Policy Committee (MPC) decided to lower the Central Bank Rate (CBR) by 25 basis points to 8.75 percent from 9.00 percent, during its meeting held on February 10, 2026,” CBS chair stated.
CBK said inflationary pressures remain subdued, with headline inflation easing to 4.4 per cent in January 2026, down slightly from 4.5 per cent in December 2025. This remains below the midpoint of the government’s target range of 5 per cent ±2.5 per cent.
According to the MPC, non-core inflation, largely driven by food prices, declined to 10.3 per cent, while core inflation edged up marginally to 2.2 per cent, reflecting higher prices for some processed food items.
The committee said inflation is expected to remain stable in the near term, supported by favourable weather conditions, stable energy prices and a relatively steady exchange rate.
Kenya’s economy has continued to show resilience, with real GDP growth estimated at 5.0 per cent in 2025, driven largely by the services and industrial sectors. The agriculture sector is expected to recover gradually following improved rainfall patterns.
Growth is projected at 5.5 per cent in 2026 and 5.6 per cent in 2027, provided weather conditions remain favourable and private-sector activity strengthens.
The CBK also pointed to improved credit conditions, noting that private-sector credit growth rose to 6.4 per cent in January 2026, reflecting increased lending to construction, trade and consumer goods.
Average commercial bank lending rates declined to 14.8 per cent, from 15.0 per cent in October 2025, with further reductions expected following the latest rate cut.
To enhance the effectiveness of monetary policy transmission, the MPC approved a narrowing of the interest rate corridor from ±75 basis points to ±50 basis points, while adjusting the Discount Window rate to 50 basis points above the CBR.
Also Read: Central Bank of Kenya lowers base lending rate to 9%
The committee also confirmed that the Risk-Based Credit Pricing Model (RBCPM) will be fully implemented in March 2026, a move expected to improve transparency in loan pricing and expand access to affordable credit, particularly for small and medium-sized enterprises.
The latest cut follows a previous reduction in December 2025, when CBK lowered the CBR to 9.0 per cent, continuing a series of policy easings aimed at stimulating economic activity.
At the time, the Kenya Bankers Association (KBA) urged caution, warning against excessive monetary loosening amid global uncertainties.
The MPC said it would continue to closely monitor both domestic and international developments to ensure inflation remains contained while supporting growth and exchange rate stability.
The next MPC meeting is scheduled for April 2026.
