At its second annual meeting held on April 8, 2026, the Monetary Policy Committee of the Central Bank of Kenya (Central Bank of Kenya) decided to maintain its benchmark rate (CBR) at 8.75%. This decision marks a historic pause in a record monetary easing cycle of 10 consecutive rate cuts, which began in June 2024 and saw the rate fall from 13.0% to 8.75%. The CBK justified this status quo by the need to monitor the impact of the Middle East conflict on the national economy. The institution is particularly concerned about possible second-round effects linked to rising global energy prices on overall inflation.
On April 8, 2026, the Central Bank of Kenya (Central Bank of Kenya) maintained its key policy rate at 8.75%. This decision brings to a halt a record cycle of 10 consecutive rate cuts that began in June 2024. The status quo aims to monitor the impact of the Middle East conflict on the national economy. The institution is concerned about potential inflationary effects linked to rising global energy prices. The CBK is adopting a cautious stance to stabilize Kenya’s financial outlook.
“Any impact of this on the banking sector? That’s not to say that there won’t be any impact. But of course, first of all, it depends on how long this conflict lasts.”
Kamau Thugge, Governor of the Central Bank of Kenya (CBK) – Kenya
To reassure markets amid volatility in the Kenyan shilling, the Central Bank of Kenya is relying on the strength of its foreign exchange reserves, supported by agricultural exports and diaspora remittances. However, the CBK has lowered its 2026 growth forecast from 5.5% to 5.3%, reflecting the authorities’ caution in the face of global instability.
“We have a very, very large cushion, if I may put it that way. In our buffers, we have strengthened our buffers. We were waiting for this kind of shock. That is why we built up our reserves to the level where they are now. And I do believe that with that surplus and with the amount of reserves that we have, we should be able to manage volatility.”
Kamau Thugge, Governor of the Central Bank of Kenya (CBK) – Kenya
According to the Central Bank of Kenya, despite this challenging environment, domestic conditions have remained broadly supportive for Kenya. Private sector credit growth reached a peak of 8.1% in March 2026. Bank lending rates declined to 14.7%, down from 17.2% in November 2024. GDP growth for 2025 is estimated at 5.0%, despite domestic constraints. However, growth projections for 2026 have been revised downward from 5.5% to 5.3% due to the conflict.
