Kenya is among the five East African banks holding interest rates for the current bank cycle out of the seven central banks.
The Central Bank of Kenya (CBK) recently maintained its benchmark lending rate, joining a broader group of regional banks, including those of Uganda, Tanzania, and Ethiopia.
CBK’s Monetary Policy Committee (MPC) on June 9 reported that the Central Bank Rate (CBR) will be maintained at 8.75 percent.
“Bank extends hold: At its meeting on 9 June, the Central Bank of Kenya (CBK) decided to maintain its policy rate at 8.75%. This marks the second consecutive hold after 10 straight cuts totaling 425 basis points since August 2024,” CBK noted during the MPC meeting.
This decision defied active lobbying from the Kenya Bankers Association (KBA), which had urged a rate hike to curb inflation triggered by the conflict in the Middle East.
Additionally, the hold on June 9 marked the second consecutive hold after 10 cuts totaling 425 basis points since August 2024.
Further, the CBK argued that while Kenya’s inflation accelerated to 6.7 percent in May, it remains within the government’s target range of 2.5 to 7.5 percent.
However, the bank has revised its 2026 growth forecast downward to 4.9 percent from 5.3 percent, citing uncertainties stemming from global trade dynamics and the ongoing conflict in Iran.
Governor Kamau Thugge emphasized that future moves will be strictly data-dependent, focusing on food and energy price trends.
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East African Central Banks’ Interest Rates
Banks in Uganda and Tanzania have also maintained stable lending rates, with the Bank of Uganda keeping the interest rate at 9.75 percent, marking its seventh consecutive meeting without a change.
Despite inflation rising to 3 percent in April, Ugandan policymakers believe the current interest rate is appropriate to support a GDP growth projection of 6.5 to 7 percent for the coming fiscal year.
Further, to manage liquidity without raising the main rate, the bank instead increased the Cash Reserve Requirement (CRR) to 11 percent.
Similarly, the Bank of Tanzania held its CBR at 5.75 percent for the second quarter of 2026 while forecasting a 6.3 percent expansion this year.
Tanzania, however, implemented a monetary policy to maintain the 7-day interbank rate within 3.75% to 7.75%.
“The MPC decided to maintain the CBR at 5.75 percent for the first quarter of 2026. In line with this, the Bank was to implement monetary policy to keep the 7-day interbank rate within the band of 3.75 to 7.75 percent, thereby anchoring inflation expectations within the target, while supporting economic growth through credit expansion,” The Bank of Tanzania indicated during the meeting.
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East African Banks with Hiked and Lowered Interest Rates
While most of the East African banks maintained the interest rates, the National Bank of Rwanda hiked its policy rate by 100 basis points to 8.25 percent.
The hike to 8.25% in May 2026 was the second consecutive hike necessitated by inflation in Rwanda, which was up to 13% above the bank’s 8% ceiling.
On the other hand, the Central Bank of the Congo (BCC) cut its benchmark interest rate to 13.5% from 15% at its April 9 meeting.
The cut follows previous rate drops from 25% to 17.5% in late 2025 and then to 15% in January 2026.
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