The Central Bank of Kenya (CBK) records confirm that Kenya’s overall inflation rate stood at 4.4 percent in March 2026 compared to the 4.3 percent in February.
According to CBK, the inflation rate is expected to increase with the global growth projected to remain at 3.3 percent in 2026.
In addition, core inflation remained stable at 2.1 percent in February and March due to lower prices for some processed food items, including sugar and maize flour, according to the CBK.
On the other hand, the non-core inflation increased to 10.8 percent in March from the recorded 10.1 percent in February due to higher prices of tomatoes and Irish potatoes.
Speaking during the CBK Monetary Policy Committee (MPC) press briefing, Governor Kamau Thugge noted that inflation in the economy was due to the ongoing conflict in the Middle East.
“The conflict in the Middle East has disrupted the global supply chain, leading to significantly higher energy prices and global inflation,” Kamau stated.
He, however, noted that despite the global inflation, the inflation is expected to remain within the target range in the year.
Further, the disruption of the global supply chains also caused the increase in the international oil and fertilizer prices.
In addition, the Governor stated that food prices are expected to remain stable, as is the exchange rate.
The GDP growth in Kenya in 2025 was estimated at 5.3 percent compared to the previous projection of 5.5 percent in 2024.
According to Kamau, the leading indicators of the economic growth activity in Kenya are projected to be 5.3 percent in 2026, compared to the previous 5.5 percent, due to the ongoing Middle East conflict.
Also Read: Hopes for Cheaper Bank Loans Shattered as CBK Maintains Base Rate
CBK Rates
On April 8, 2026, the Monetary Policy Committee (MPC) met to review, among others, the lending rates, which the Committee set at 8.75 percent.
The Bank’s foreign exchange reserves currently stand at USD 13,354 million, providing 5.68 months of import cover as the Bank continues to provide coverage and a buffer against short-term domestic and external shocks.
In addition, the ratio of the gross non-profit loans (NPLs) to gross loans was at 15.6 percent in March, an increase from the 15.4 percent in December 2025.
Growth in the commercial banks’ lending to the private sector also increased in March to 8.1 percent from the previous record of 7.4 percent in February and -2.9 percent in January 2025.
CBK reported average commercial banks’ lending at 14.7 percent in March, down from the record 14.8 percent in February 2026 and 17.2 percent in March 2024.
The MPC also noted that the full implementation of the Risk-Based Credit Pricing Model (RBCPM) in March 2026 is expected to enhance lending transparency and improve the influence of monetary policy decisions on commercial bank interest rates.
Also Read: CBK Invites Kenyans to Invest in Ksh20 Billion Treasury Bonds from Ksh50,000
External Sector and Currency Stability
Kenya’s external accounts showed that the current account deficit was estimated at 2.4 percent of GDP for the 12 months ending February 2026, compared to 1.3 percent in 2025.
Export goods increased by 8.1 percent, with tea, coffee, and horticulture in the lead, while the import goods grew by 10.4 percent.
The deficit is projected to reach 3.0 percent of GDP by the end of 2026, largely due to higher oil prices and lower service receipts, according to the CBK.
