Kenya’s central bank has lowered its benchmark lending rate by 25 basis points to 13 percent, marking its first policy easing in months as authorities move to support economic activity amid easing inflation pressures. The decision was announced in Nairobi on Monday following the Monetary Policy Committee’s scheduled meeting.
According to Reuters, policymakers said inflation had continued to trend toward the midpoint of the target range, creating room for a modest reduction in borrowing costs. The committee explained that the adjustment aimed to reinforce market confidence and encourage credit expansion to productive sectors.
Governor Kamau Thugge said the bank would maintain vigilance while calibrating future actions to safeguard price stability. “This rate cut reflects our assessment of improving conditions and our commitment to sustaining economic momentum while keeping inflation in check,” he stated.
The meeting took place as Kenya navigates a delicate balance between tightening liquidity conditions, rising debt costs, and the need to stimulate private sector lending. Analysts cited by CNBC Africa highlighted that the rate move signals cautious optimism about the country’s macroeconomic outlook.
