Borrowers across Kenya can breathe a sigh of relief as the Central Bank of Kenya (CBK) chose to hold its benchmark lending rate steady despite a turbulent global economy. Following its meeting on April 8, 2026, the Monetary Policy Committee (MPC) maintained the Central Bank Rate (CBR) at 8.75 percent, a move that signals confidence in the country’s current financial trajectory.
The committee pointed to a resilient domestic economy, manageable inflation levels, and steady credit growth as the primary drivers behind the decision. In an official statement, the CBK noted:
“The Monetary Policy Committee decided to maintain the Central Bank Rate (CBR) at 8.75 percent. The Committee noted that overall inflation remained below the mid-point of the target range, supported by stable core inflation, favourable weather conditions, and a broadly stable exchange rate.”
This decision provides a necessary anchor of stability as international markets face increasing volatility. Rising tensions in the Middle East have recently rattled global supply chains and sent energy prices climbing, putting immense pressure on oil-importing nations. By holding the CBR at 8.75 percent, the MPC seeks to safeguard Kenya’s economic recovery while shielding it from these external shocks.
The Central Bank observed that the global outlook is shifting. While experts originally projected a 3.3 percent global expansion for 2026, those expectations are now cooling. Stubbornly high inflation and cooling consumer demand, triggered by expensive energy, weigh heavily on the world stage. The committee also highlighted the persistent conflict between Russia and Ukraine, along with unpredictable trade policies, as significant hurdles to global prosperity.
Despite these global headwinds, Kenya’s inflation remains remarkably stable compared to many major economies that are still struggling to hit their targets.
The country’s overall inflation rate stood at 4.4 per cent in March 2026, a negligible rise from 4.3 per cent in February. This keeps the cost of living well within the Central Bank’s preferred target range of 5±2.5 percent. Core inflation also remained steady at 2.1 percent, largely because the prices of processed staples like sugar and maize flour have actually declined. Leading indicators suggest the economy performed well in early 2026.
However, not everything on the grocery shelf is cheaper. Non-core inflation – which tracks volatile items like fresh produce – jumped to 10.8 percent in March from 10.1 percent the previous month. Sharp price increases for staples like tomatoes and Irish potatoes drove this spike. Even with these fluctuations, the CBK remains optimistic that overall inflation will stay within safe limits for the rest of the year.
The Kenyan economy continues to show its strength, with real GDP growth hitting an estimated 5.0 percent in 2025, up from 4.7 percent in 2024. This growth stems from a recovering industrial sector, a vibrant services industry, and reliable agricultural production.
For 2026, the CBK projects an economic growth rate of 5.3 percent. While this is a slight dip from the earlier 5.5 percent forecast, the revision reflects a cautious approach to the emerging risks born from the Middle East crisis.
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