Kenya’s base lending rate has been trimmed to 9.5 per cent, the Central Bank of Kenya (CBK) announced on Tuesday, marking a 25-basis-point drop from the previous 9.75 per cent.

The move follows the Monetary Policy Committee’s (MPC) Tuesday meeting, which weighed the country’s economic indicators and concluded that conditions favoured a modest monetary easing.

According to the CBK, the decision was anchored on stable inflation, a gradually recovering economy, and rising private sector lending.

The regulator also cited a narrowing current account deficit, a resilient banking sector, and foreign exchange reserves sufficient to cover 4.8 months of imports as key factors underpinning the move.

In its statement, the CBK noted, “The MPC decided to lower the Central Bank Rate (CBR) by 25 basis points to 9.50 per cent from 9.75 per cent.” The cut comes as commercial banks begin adjusting their lending rates in line with CBK’s guidance, potentially offering borrowers some relief.

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The committee explained that it had assessed both domestic and global economic developments before concluding that there was scope for further easing to reinforce earlier policy measures.

This, it said, would help stimulate bank lending to the private sector and support economic activity while keeping inflation expectations firmly in check and maintaining exchange rate stability.

The MPC emphasised that it will keep a close watch on the impact of the rate cut alongside shifts in the global and local economy. It also confirmed its next policy meeting will be held in October 2025.

With this decision, the CBK has signalled confidence in Kenya’s macroeconomic resilience, while leaving the door open for further action should conditions change.