The Central Bank of Kenya’s Monetary Policy Committee (MPC) has maintained the Central Bank Rate (CBR) at 8.75 percent following its meeting on October 7, 2026, citing the need to keep inflation expectations anchored and maintain exchange rate stability amid rising global economic risks. The decision comes as higher energy prices linked to the conflict in the Middle East continue to pose risks to global growth and inflation.
Kenya’s overall inflation rose to 6.8 percent in September 2026 from 6.6 percent in August, remaining within the target range. Core inflation also increased to 4.0 percent from 3.4 percent, mainly due to higher prices of processed food items, including milk, wheat products and edible oils. However, non-core inflation declined to 14.0 percent from 14.7 percent.
The MPC said government interventions, including subsidies and a temporary reduction of VAT on fuel, continued to help contain inflationary pressures. It expects inflation to remain within the target range in the near term, supported by monetary policy measures, government interventions and a stable exchange rate.
The Committee also revised Kenya’s projected economic growth for 2026 upwards to 5.0 percent from an earlier forecast of 4.9 percent, mainly due to stronger performance in the industrial and services sectors. Growth stood at 4.6 percent in 2025, while the 2027 forecast remains at 5.3 percent.
The banking sector remained stable, with commercial banks lending to the private sector growing by 10.6 percent in September, up from 10.3 percent in August. Average commercial bank lending rates stood at 14.4 percent during the month.
CBK said foreign exchange reserves stood at $14.702 billion, equivalent to 5.9 months of import cover, providing a buffer against domestic and external economic shocks.
The MPC said it would continue monitoring global oil prices, inflation risks and other economic developments. Its next meeting is scheduled for December 2026.
