The Central Bank of Kenya cut its key interest rate to 9.75% on Tuesday, from 10.00% previously, the institution's Monetary Policy Committee announced.

According to the monetary policy committee, there was scope for further easing of monetary policy in order to reinforce previous measures aimed at stimulating bank lending to the private sector and supporting economic activity, while maintaining exchange rate stability and anchoring expectations. inflationary

In May 2025, headline inflation in Kenya fell to 3.8% from 4.1% in April, thus staying below the midpoint of the target range of 5 ± 2.5%. “Overall inflation is expected to remain below the midpoint of the target in the short term, supported by the stability of food and energy prices, as well as by the stability of the exchange rate,” the monetary committee said.

Furthermore, economic growth slowed in Kenya in 2024, reaching 4.7% from 5.7% in 2023, due to a deceleration in several sectors. However, the Central Bank points out that economic indicators show an improvement in the first quarter of 2025. The GDP growth forecast has been revised to 5.2% from 5.4%, due to the rise in commercial tariffs

This cut in the key rate comes some time after the country's commercial banks asked the CBK to cut it further, justifying their request by the stability of inflation and the exchange rate, as well as by the need to strengthen credit to the private sector.