The Central Bank of Kenya (CBK) decided to keep the Central Bank Rate (CBR) steady at 8.75 percent during its Monetary Policy Committee (MPC) meeting on April 8, 2026.
This decision reflects the policymakers’ careful observation of global trends, particularly the ongoing conflict in the Middle East, which has disrupted supply chains and led to increased energy prices.
Despite these external challenges, Kenya’s inflation remains well within the target range. As of March 2026, headline inflation registered at 4.4 percent, slightly up from 4.3 percent in February, yet still comfortably below the government’s target midpoint of 5 ± 2.5 percent.
Core inflation held steady at 2.1 percent, bolstered by decreased prices in processed foods such as sugar and maize flour. In contrast, non-core inflation saw a minor rise due to heightened vegetable prices.
The CBK’s bulletin noted, “The Kenya Shilling Overnight Interbank Average Rate (KESONIA) remained stable at 8.75 percent on April 9, unchanged from April 2.”
Shilling Stability Against the Dollar
The Kenya shilling maintained its stability against major international and regional currencies during the week ending April 9, 2026. According to CBK data, the shilling traded at Ksh129.53 per US dollar on April 9, a slight improvement from Ksh129.99 on April 2.
Foreign exchange reserves remained robust at Ksh1.72 trillion as of April 9, providing approximately 5.7 months of import cover—well above the statutory requirement of at least four months. These reserves create a buffer against external shocks and support exchange rate stability amidst global market fluctuations.
Decline in Domestic Lending Rates
The CBK reported positive developments in the domestic financial market. The money market demonstrated liquidity during the week ending April 9, with commercial banks holding average excess reserves of Ksh6.9 billion above the 3.25 percent Cash Reserve Ratio requirement.
The KESONIA rate remained stable at 8.75 percent throughout this period. Interbank activity increased, with the number of transactions averaging 32, up from 24 the previous week, although the total value traded declined to Ksh14 billion from Ksh18.7 billion.
Average lending rates in the domestic market continued to decrease, and credit growth to the private sector showed improvement.
Steady Economic Outlook
Kenya’s economy exhibited resilience, with real Gross Domestic Product growth estimated at 5.0 percent for 2025. The CBK projects a growth rate of approximately 5.3 percent for 2026, slightly lower than previous forecasts due to potential risks from rising global energy prices and the ongoing conflict in the Middle East.
The MPC affirmed that the current monetary policy stance is suitable for maintaining inflation expectations within the target range and supporting exchange rate stability. The committee plans to reassess the policy during its next meeting in June 2026.
