The Central Bank of Kenya (CBK) has retained its benchmark lending rate at 8.75 % as policymakers assess emerging inflation risks and global oil prices.
In its latest Monetary Policy Committee (MPC) statement following the April 8 meeting, the central bank indicated that the current stance remains appropriate to keep inflation within target while safeguarding exchange rate stability.
“The Monetary Policy Committee (MPC) decided to maintain the Central Bank Rate (CBR) at 8.75 percent during its meeting held on April 8, 2026,” the statement read.
On March 7, The Kenya Bankers Association (KBA) urged CBK to maintain the benchmark policy rate at 8.75 %, citing growing global uncertainties and inflation risks.
Focus on Inflation Expectations and Exchange Rate Stability
The Monetary Committee said the decision to hold the Central Bank Rate (CBR) was guided by the need to ensure inflation expectations remain anchored within the target range.
Also Read: Kenya Bankers Association Urges CBK to Hold Rate at 8.75% Amid Global Risks.
Kenya’s inflation has remained relatively stable in recent months, but risks are beginning to build, particularly from external shocks, including the ongoing Middle East and Russia-Ukraine conflicts, which are affecting oil prices.
According to MPC, the recent increase in international oil prices has raised the likelihood of second-round effects on inflation.
These effects occur when initial increases in fuel costs cascade into other sectors of the economy, including transport, food distribution, and manufacturing, hence pushing up overall consumer prices.
“Kenya’s overall inflation stood at 4.4 percent in March 2026, compared to 4.3 percent in February, and remained below the mid-point of the target range of 5±2.5 percent. Core inflation remained stable at 2.1 percent in February and March, supported by lower prices of some processed food items, particularly sugar and maize flour,” read part of the statement.
MPC revealed that the Kenyan economy remained resilient in 2025, with real GDP growth by at 5.0 % compared to 4.7 % in 2024, supported by
- Rebound of the industrial sector
- Resilience of the services sector
- Stable agriculture sector growth
Economic growth is projected at 5.3 % in 2026, compared to the former projection of 5.5 %.
Also Read: CBK Invites Kenyans to Invest in Ksh20 Billion Treasury Bonds from Ksh50,000
CBK Signals Readiness to Act Ahead of June Review
While holding rates steady, MPC stated its readiness to take further action if necessary, depending on how economic conditions unfold.
The Committee said it will closely monitor the impact of the current policy decision, as well as the trajectory of the Middle East conflict and its implications for inflation, growth, and financial stability.
Attention will also remain on other global and domestic factors that could influence the economic outlook.
“Additionally, the MPC assessed that there is a need to monitor any second-round effects of the recent increase in international oil prices on overall inflation. The MPC will closely monitor the impact of this policy decision, the evolution and impact of the conflict in the Middle East, as well as other developments in the global and domestic economies, and stands ready to take further action as necessary in line with its mandate,” read part of the statement.
