Kenya Central Bank Cuts Benchmark Rate To 8.75% For 10th

Tuesday 17th February 2026

By inAfrika Newsroom

Kenya’s central bank has cut its benchmark lending rate to 8.75% for the 10th consecutive meeting, extending an easing cycle officials say is meant to spur private-sector credit and support growth as inflation remains inside the target band.

The Central Bank of Kenya reduced the policy rate from 9.00% to 8.75% after its Monetary Policy Committee meeting on February 10, according to Reuters. The decision aligned with expectations among most economists, even as some banking-sector voices had argued for a pause to allow earlier cuts to work through the system.

Kenya benchmark rate cut: key details

Reuters reported that January inflation eased to 4.4% from 4.5% in December, keeping price growth within the central bank’s target range of 2.5% to 7.5%. The central bank said the easing path aimed to encourage faster economic growth and improve the affordability of financing.

The central bank also tightened its interest-rate corridor around the policy rate, narrowing it from plus-or-minus 75 basis points to plus-or-minus 50 basis points. That technical change can influence how closely short-term market rates track the policy setting, affecting liquidity management and bank funding costs.

Kenya’s monetary stance stands out in a region where central banks have faced mixed inflation pressures tied to food prices, currency moves and fuel costs. In some markets, policy has remained tight to stabilize currencies and curb imported inflation, while others have started to cut as inflation falls and growth concerns rise. Kenya’s decision adds to evidence that some East African policymakers are trying to keep credit flowing while staying within inflation targets.

Reuters cited central bank projections that Kenya’s economy, which has posted about 5% annual growth in recent years, could grow 5.5% in 2026 and 5.6% in 2027, up from an estimated 5.0% in 2025. The bank also projected the current account deficit would narrow to 2.2% of GDP in 2026 and 2027. The policy direction matters beyond Kenya’s borders because Nairobi is a financial hub for regional banking groups and cross-border trade finance. Rate shifts can affect government bond yields, corporate borrowing costs, and the pace of credit expansion—factors watched by investors and businesses across the East African Community. The Reuters report noted the bank’s stated goal of accelerating growth through more affordable financing while monitoring inflation and external risks.