The Central Bank of Kenya (CBK) has maintained its lending rate at 8.75 percent for the second time in row, the bank’s monetary policy committee announced on Tuesday.
In a statement issued after a meeting, the committee said the decision aims to control inflation amid rising global and domestic price pressures.
The decision comes at a time when inflation in Kenya is rising again, mainly driven by higher energy costs linked to global oil price increases. Kenya’s overall inflation rose to 6.7 per cent in May 2026, up from 5.6 per cent in April.
“The conflict in the Middle East has disrupted global supply chains and led to a sharp increase in energy prices and transportation costs, resulting in higher inflation and moderated global growth prospects,” CBK said in a statement.
Non-core inflation recorded a sharper jump to 16.0 percent from 13.4 percent over the same period, reflecting increases in fuel, gas, and selected food items.
This means that items like tomatoes and cabbages remained particularly expensive, adding further strain on ordinary Kenyans already grappling with elevated fuel costs at the pump.
CBK said the decision to hold the rate unchanged was guided by both global risks and domestic price developments.
“The Committee concluded that the current monetary policy stance, with the Central Bank Rate unchanged at 8.75 percent, remains appropriate to ensure that inflation expectations remain anchored within the target range, and the exchange rate remains stable,” it said.
The committee noted that the conflict in the Middle East has disrupted global supply chains, pushing up energy prices and transport costs. This has slowed global growth and increased inflation pressures across major economies.
Global growth is projected at 3.1 percent in 2026, down from 3.4 percent in 2025, while global inflation is expected to rise to 4.4 percent from 4.1 percent.
According to CBK, elevated energy prices and ongoing geopolitical risks, including the Russia-Ukraine conflict, continue to affect global price stability and trade flows.
MG/as/APA