The Central Bank of Kenya's Monetary Policy Committee (MPC) has announced a reduction in its benchmark rate, lowering it to 9.50 percent. This decision, made during its recent meeting, represents a 25 basis point cut from the previous rate of 9.75 percent, which was set at its June 11 meeting. This move is part of the bank's continued policy this year to stimulate lending by commercial banks and support broader economic activity across the country.

CBK Governor Kamau Thugge stated that the committee's decision was influenced by a favorable inflation environment and a positive economic growth outlook in the short term. The resilience of the Kenyan economy was further underscored by the recently released Gross Domestic Product (GDP) data for the first quarter of 2025, which showed a robust real GDP growth of 4.9 percent. This growth was primarily driven by strong performance in the agricultural sector and a significant recovery in industrial activity, particularly within the construction sector. Leading indicators of economic activity suggest that this improved performance is likely to extend into the second quarter of 2025.

Furthermore, Governor Thugge highlighted the continued improvement in commercial banks’ lending to the private sector. This key indicator reached 3.3 percent in July 2025, an increase from 2.2 percent recorded in June of the same year, signifying a positive trend for private investment and economic expansion.