Nairobi — The Central Bank of Kenya (CBK) has lowered its benchmark lending rate by 25 basis points to 8.75 per cent in a move aimed at stimulating private sector credit and supporting economic growth.

In a statement, the Monetary Policy Committee (MPC) said the decision was informed by stable inflation, steady economic growth and continued stability in the foreign exchange market.

"Kenya's overall inflation declined to 4.4 per cent in January 2026 from 4.5 per cent in December 2025 and remains below the midpoint of the target range of 5±2.5 per cent," the MPC said.

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The committee added that inflation is expected to remain below the midpoint of the target range in the near term, supported by stable prices of processed food and energy, as well as exchange rate stability.

CBK noted that the economy remained resilient in the third quarter of 2025, with real GDP growth of 4.9 per cent, driven by a rebound in the industrial sector and continued strength in the services sector.

"The economy is expected to remain resilient, with real GDP growth projected to rise to 5.5 per cent in 2026 and 5.6 per cent in 2027," the MPC said.

The growth outlook is supported by the resilience of the services sector, continued recovery in industry and stable performance in agriculture, although CBK cautioned that risks remain, including adverse weather conditions.

The committee said it will continue to closely monitor domestic and global developments and stands ready to take further policy measures as necessary to support price stability and sustainable growth.