The Central Bank of Kenya has cut its benchmark interest rate by 25 basis points to 9 percent from 9.25 percent. This move, announced on December 9, 2025, aims to support economic growth amid resilient global and local conditions. It offers relief to borrowers as banks adjust their lending rates downward.
The Monetary Policy Committee of the Central Bank of Kenya decided to reduce the Central Bank Rate during its meeting on December 9, 2025. "The Monetary Policy Committee (MPC) decided to lower the Central Bank Rate (CBR) by 25 basis points to 9.00 per cent from 9.25 per cent," the bank stated in its announcement. This marks the ninth consecutive rate reduction, following a pattern of easing monetary policy.
Globally, economic growth has shown resilience, projected at 3.2 percent for 2025, fueled by robust consumer and business spending, especially in the United States. However, forecasts indicate a slowdown to 3.1 percent in 2026, influenced by potential increases in trade tariffs. Major central banks worldwide have also begun cautious policy easing, responding to varied inflation trends and growth prospects. International oil prices have declined due to higher production levels and weaker global demand, though uncertainties persist.
In Kenya, inflation eased to 4.5 percent in November 2025 from 4.6 percent the previous month, staying below the target midpoint of 5 percent. Core inflation fell to 2.3 percent, driven by cheaper processed foods like maize flour and sugar. Non-core inflation ticked up slightly to 10.1 percent, attributed to rising prices of vegetables including tomatoes, onions, and cabbage. Overall, inflation is expected to remain stable, bolstered by steady energy costs, a stable exchange rate, and lower food prices.
The economy grew at an average of 4.9 percent in the first half of 2025. Projections show acceleration to 5.2 percent for the full year and 5.5 percent in 2026, supported by strong performance in services, agriculture, and industrial recovery. The MPC highlighted risks such as poor weather, trade disruptions, and geopolitical issues that could impact these estimates. The next meeting is scheduled for February 2026.