NAIROBI, Feb 10 – Kenya’s central bank has reduced its benchmark interest rate for the tenth consecutive time, extending one of the longest easing cycles in the region as policymakers seek to boost private-sector lending.
The Central Bank of Kenya’s Monetary Policy Committee on Tuesday cut the policy rate to 8.75%, down from 9.00%. Officials said the move builds on earlier measures aimed at improving credit conditions and supporting economic expansion.
Inflation remains comfortably within the bank’s target range, giving policymakers room to continue easing. Consumer prices rose 4.4% year on year in January, slightly below December’s 4.5% reading and well inside the preferred 2.5% to 7.5% band.
Economists see the decision as part of a deliberate effort to frontload support for growth. Razia Khan, chief Africa and Middle East economist at Standard Chartered Bank, said the central bank appears focused on driving faster economic momentum and lowering the cost of financing while conditions allow.
Kenya’s economy, the largest in East Africa, has been growing at an annual pace of about 5%, though near-term risks remain. The national weather service has warned of a possible drought, which could weigh on agricultural output and overall growth.
The central bank now projects economic growth of 5.5% this year and 5.6% in 2027, compared with an estimated 5.0% last year. The downward revision for 2025 reflects weaker agricultural performance in the third quarter, the bank said.
Officials also forecast the current account deficit at 2.2% of gross domestic product in both 2026 and 2027, narrowing from an estimated 2.4% in 2025.
In a further policy adjustment, the bank tightened the interest rate corridor around the benchmark rate to plus or minus 50 basis points from the previous plus or minus 75 basis points, reinforcing its intent to strengthen monetary policy transmission.
