The Monetary Policy Committee (MPC) of the Central Bank of Kenya (CBK) on Tuesday eased its monetary policy stance, lowering the benchmark Central Bank Rate (CBR) by 75 basis points to 10.00 per cent from 10.75 per cent.
In a move aimed at enhancing the effectiveness of its policy implementation, the MPC also approved a substantial narrowing of the interest rate corridor around the CBR, from ±150 basis points to ±75 basis points.
The MPC cited several factors influencing its decision, including the expectation of overall inflation remaining below the midpoint of the 5±2.5 percent target range in the near term, the trend of interest rate reductions in major global economies, and the observed gradual decline in average lending rates since December 2024 despite subdued private sector credit growth.
