The Central Bank of Kenya slashed its benchmark interest rate by 25 bps to 9% in its December 2025 meeting, marking the ninth consecutive rate cut. Governor Kamau Thugge said the decision “will augment the previous policy actions aimed at stimulating lending by banks to the private sector and supporting economic activity”. "The cut will also ensure inflation expectations stay firmly anchored, and the exchange rate remains stable", he added. The annual inflation rate in Kenya eased to 4.5% in November from 4.6% in each of the previous two months. Inflation has been below the 5% midpoint of the central bank’s target band since mid-2024. It is expected to remain below that level in the near term, thanks to lower processed food prices, stable energy costs, and continued exchange rate stability.
