CBK cuts policy rate to 9.25% in bid to support growth amid inflation stability
The Central Bank of Kenya (CBK) has lowered the Central Bank Rate (CBR) by 25 basis points to 9.25 percent, its lowest level since January 2023, marking an unprecedented eighth consecutive cut since February 2024, when the benchmark stood at 13 percent.
The regulator argues that the move will augment the previous policy actions aimed at stimulating lending by banks to the private sector and supporting economic activity, while ensuring inflationary expectations remain firmly anchored.
The latest move by Central Bank is expected to move the needle in unlocking credit to the private sector which has remained low, as financial institutions opt for less risky investments.
The cuts, now bringing the cumulative reduction in CBR to 375 basis points, represent the longest monetary easing streak in the country.
According to CBK Governor Dr. Kamau Thugge, the decision reflects continued easing to stimulate lending and sustain economic recovery.
“The whole idea of lowering the CBR was to stimulate credit, in turn stimulate economic growth and in turn improve the labour market, stimulate job creation and let’s have an increment in employment,” said Dr. Thugge.
The CBK has also announced plans to hold further talks with the International Monetary Fund (IMF) to discuss a new funding package.
