The Central Bank of Kenya (CBK) has lowered its benchmark lending rate from 9.75% to 9.5% in a move aimed at stimulating economic activity and encouraging private-sector lending.
Announcing the decision after chairing the Monetary Policy Committee (MPC) meeting on Tuesday, CBK Governor Kamau Thugge said there is room for further monetary easing to reinforce earlier measures designed to expand bank credit and support economic growth. He emphasized that the bank would continue to keep inflation expectations anchored and maintain exchange rate stability.
“Growth in credit to key sectors of the economy, particularly manufacturing, trade, building and construction, and consumer durables, improved in June and July,” Thugge noted in a statement issued in Nairobi.
The MPC observed that central banks in major economies are also lowering interest rates, though at varying paces, depending on inflation levels and growth prospects.
Kenya’s overall inflation rose slightly to 4.1% in July from 3.8% in June but remained below the 5.0% mid-point of the CBK’s target range.
The CBK confirmed it will closely monitor the effects of the rate cut alongside developments in the domestic and global economy.
The bank said it stands ready to take further action as necessary, in line with its mandate to maintain price stability and promote sustainable economic growth.
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