In a research note released on Friday, the KBA's Centre for Research on Financial Markets and Policy cited inflation rising to 6.8% in September from 6.6% in August. That remains within the CBK's target range of 2.5% to 7.5%, though it is moving closer to the upper limit. The association says a stable exchange rate and strong foreign exchange reserves, estimated at 6.1 months of import cover, give the CBK room to maintain its current policy stance.
KBA argues that leaving the rate unchanged will support the recovery in private-sector credit and help businesses cope with elevated operating and input costs. It also noted that favourable interest rate differentials and falling Treasury bill yields are supporting credit growth.
The bankers warned, that global oil price volatility and potential weather shocks could increase inflationary pressures. They noted that exchange rate stability has helped limit imported inflation, with Kenya heavily dependent on imported fuel.
The CBK cut the CBR by 25 basis points to 8.75% in February 2026 and held it at the same level in its last meeting in August. If the MPC retains the rate on Wednesday, it would be the fourth consecutive meeting without a change. In August, the committee said the rate would keep inflation expectations anchored and the exchange rate stable and that it was ready to act further if needed.
