CBK retains lending rate at 8.75% for third time in a row amid Middle East risks
The Central Bank of Kenya (CBK) has retained the Central Bank Rate (CBR) at 8.75 per cent for the third consecutive time as it weighs inflation risks against economic growth and private sector credit. The Monetary Policy Committee (MPC) maintained the rate during its meeting on Tuesday, August 11, 2026, after also keeping it unchanged […]
The Central Bank of Kenya (CBK) has maintained the Central Bank Rate (CBR) at 8.75% for the third consecutive time due to concerns over inflation risks and economic growth amidst risks stemming from the Middle East. This decision was made during the Monetary Policy Committee (MPC) meeting on Tuesday, August 11, 2026, following previous unchanged rates in April and June 2026.
The last reduction was in February 2026, when the CBR was cut from 9% to 8.75% to boost private sector lending and economic activity. Despite this, the central bank expects inflation to stay within the target range if the Middle East conflict subsides. Recent inflation figures indicate core inflation at 3.2% and non-core inflation at 15% in July 2026, with food prices remaining a concern.
The CBK expects inflation to remain stable in the short term. The ongoing Middle East conflict has raised energy prices and transport costs, posing risks to global growth and inflation. Global growth is now projected to slow to 3% in 2026 from 3.5% in 2025. The Kenyan economy expanded by 5.3% in the first quarter of 2026, up from 4.9% in the same period of 2025, with broad-based growth in industrial and service sectors.
The CBK projects continued growth of 4.9% in 2026 and 5.3% in 2027. However, prolonged conflict, trade policy uncertainty, and El Niño could impact the outlook. Despite external risks, Kenya's strong foreign exchange reserves provide a buffer against shocks.
Written by urgent.news from People Daily Kenya's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
