The Monetary Policy Committee decided to lower the Central Bank Rate (CBR) by 25 basis points, bringing it down to 9.25% from the previous 9.50%.
This adjustment marks the latest in a series of rate cuts that began last year, reflecting confidence in the country’s economic resilience.
The decision comes as Kenya continues to show positive signs of recovery and stability. Factors such as controlled inflation, improved fiscal management, and steady growth in key sectors have contributed to this environment.
By easing borrowing costs, the CBK aims to encourage more lending from commercial banks to businesses and individuals, potentially boosting investment and consumer spending.
This rate cut is expected to have ripple effects across the financial sector. Lower interest rates could make loans more affordable, helping to alleviate pressures from non-performing loans that have been a concern for bankers recently.
Industry groups, including the Kenya Bankers Association, have previously advocated for further reductions to capitalize on favorable economic conditions.
Overall, this policy shift underscores the CBK’s proactive approach to monetary policy in a dynamic economic landscape.
Market observers will be watching closely to see how this influences inflation trends, currency stability, and broader growth indicators in the coming months.