The Central Bank of Kenya (CBK) has retained its benchmark Central Bank Rate (CBR) at 8.75 percent<\/strong>, citing the need to keep inflation expectations anchored while supporting stability in the foreign exchange market.<\/p>\n\n\n\n The decision was reached by the Monetary Policy Committee (MPC) during its meeting on October 7, 2026, as the committee assessed developments in inflation, economic growth, the exchange rate and global economic conditions.<\/p>\n\n\n\n The MPC noted that Kenya’s overall inflation rose to 6.8 percent in September<\/strong>, up from 6.6 percent in August, but remained within the government’s target range. The increase was largely attributed to higher prices of food and energy.<\/p>\n\n\n\n Core inflation also increased to 4.0 percent in September from 3.4 percent in August<\/strong>, driven mainly by higher prices of processed food products, including milk, wheat products and edible oils. However, non-core inflation declined to 14.0 percent from 14.7 percent<\/strong>, reflecting lower vegetable prices, despite continued pressure from fuel and energy costs.<\/p>\n\n\n\n The committee said government interventions, including subsidies and the temporary reduction of VAT on fuel, had helped ease some inflationary pressures.<\/p>\n\n\n\n The CBK has revised upwards its projection for Kenya’s economic growth in 2026 to 5.0 percent<\/strong>, from an earlier estimate of 4.9 percent.<\/p>\n\n\n\n The stronger outlook is mainly supported by improved performance in the industry and services sectors. Economic growth is projected to remain strong in 2027 at 5.3 percent<\/strong>.<\/p>\n\n\n\n However, the CBK warned that the outlook remains exposed to risks, particularly prolonged geopolitical tensions, uncertainty over global trade policies and the potential effects of the El Ni\u00f1o weather phenomenon<\/strong>.<\/p>\n\n\n\n The committee said surveys conducted in September showed continued optimism among businesses about economic activity over the next 12 months. Respondents attributed the optimism to macroeconomic stability, increased government infrastructure spending, digital innovation and improved private-sector credit growth.<\/p>\n\n\n\n Businesses, however, remained concerned about elevated energy costs linked to the conflict in the Middle East and possible disruptions from El Ni\u00f1o-related weather conditions.<\/p>\n\n\n\n The country’s current account deficit widened to an estimated 3.1 percent of GDP in the 12 months to August 2026<\/strong>, compared with 2.1 percent during a similar period in 2025.<\/p>\n\n\n\n The CBK attributed the widening deficit largely to a higher trade deficit and lower secondary income transfers as a share of GDP.<\/p>\n\n\n\n Goods exports increased by 11.8 percent<\/strong>, supported mainly by horticulture, tea, machinery and transport equipment. At the same time, goods imports grew by 15.8 percent<\/strong>, driven by higher imports of food, mineral fuels and intermediate and capital goods.<\/p>\n\n\n\n Services receipts rose by 8.7 percent<\/strong>, mainly on the back of increased travel services receipts, while diaspora remittances declined by 1.3 percent<\/strong>.<\/p>\n\n\n\n The CBK expects the current account deficit to widen further to about 3.2 percent of GDP in 2026<\/strong>, mainly because of increased mineral-fuel imports following higher international oil prices and lower remittance inflows.<\/p>\n\n\n\n Despite the external pressures, Kenya’s foreign exchange reserves remained at a comfortable level.<\/p>\n\n\n\n The CBK said official reserves stood at approximately US$14.702 billion<\/strong>, equivalent to 5.9 months of import cover<\/strong>.<\/p>\n\n\n\n The reserves, the committee said, continue to provide an adequate buffer against short-term domestic and external economic shocks.<\/p>\n\n\n\n The CBK also noted that the current account deficit is expected to be fully financed by financial and capital account inflows, resulting in an overall balance of payments surplus of about US$2.426 billion in 2026<\/strong>.<\/p>\n\n\n\n The banking sector continued to record strong liquidity and capital adequacy, although the ratio of gross non-performing loans (NPLs) to gross loans stood at 13.9 percent in September 2026<\/strong>.<\/p>\n\n\n\n This was an improvement from 14.8 percent in June 2026<\/strong> and 17.6 percent in August 2025.<\/p>\n\n\n\n The CBK said reductions in non-performing loans were recorded in the financial services, agriculture, trade, and energy and water sectors, while banks continued to maintain adequate provisions against bad loans.<\/p>\n\n\n\n Commercial banks’ lending to the private sector also remained strong, with credit growth reaching 10.6 percent in September<\/strong>, compared with 10.3 percent in August and -2.9 percent in January 2025.<\/p>\n\n\n\n The growth was particularly evident in trade, building and construction, agriculture, finance and insurance, as well as consumer durables.<\/p>\n\n\n\n The MPC also noted the ongoing implementation of the FY2026\/27 Government Budget<\/strong> and the planned fiscal consolidation strategy aimed at reducing Kenya’s debt vulnerabilities over the medium term.<\/p>\n\n\n\n After considering the economic developments, the committee concluded that maintaining the CBR at 8.75 percent<\/strong> was appropriate.<\/p>\n\n\n\n The CBK said the current monetary policy stance would help ensure that inflation expectations remain anchored within the target range while supporting stability in the exchange rate.<\/p>\n\n\n\n <\/p>\n\n\n\n <\/p>\n\n\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" NAIROBI, October 7, 2026 The Central Bank of Kenya (CBK) has retained its benchmark Central Bank Rate (CBR) at 8.75 percent, citing the need to keep inflation expectations anchored while supporting stability in the foreign exchange market. The decision was reached by the Monetary Policy Committee (MPC) during its meeting on October 7, 2026, as […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-627","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=\/wp\/v2\/posts\/627","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=627"}],"version-history":[{"count":2,"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=\/wp\/v2\/posts\/627\/revisions"}],"predecessor-version":[{"id":633,"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=\/wp\/v2\/posts\/627\/revisions\/633"}],"wp:attachment":[{"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=627"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=627"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tangazadital.co.ke\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=627"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Photo: Central Bank of Kenya<\/h3>\n\n\n\n
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CBK maintains policy stance<\/h3>\n\n\n\n