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The Central Bank of Kenya (CBK) has reduced its benchmark lending rate by 50 basis points, lowering it to 10.75%. In an emailed statement, Governor Kamau Thugge and the monetary policy committee announced the move, marking the fourth rate cut as part of ongoing efforts to stimulate economic growth during a period of easing inflation.
This decision comes amid forecasts of a modest global economic rebound—with growth expected to rise from 3.2 percent in 2024 to 3.3 percent in 2025—and a gradual moderation in global inflation. The rate cut follows the recent introduction of refined core and non-core inflation measures by the Kenya National Bureau of Statistics (KNBS) and the CBK in January 2025, which aligns with the harmonized computation of the Consumer Price Index.
Current data shows that Kenya’s overall inflation stood at 3.3 percent in January 2025, with core inflation easing from 2.2 percent in December 2024 to 2.0 percent. The decline in overall inflation has been driven by lower prices for processed food items, even as non-core inflation increased due to rising food crop costs.
Looking ahead, the CBK expects overall inflation to remain below the midpoint of its target range, supported by subdued core inflation and the anticipated easing of energy prices.
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