CBK Holds Lending Rate at 8.75% as Inflation Rises and Economic Growth Slows

A view of the Central Bank of Kenya headquarters in Nairobi. The CBK has retained its benchmark lending rate at 8.75 percent amid rising inflation and growing global economic uncertainty.

Article by: Babz Abdul-Raheem.
Date: June 10,2026.

 The Central Bank of Kenya (CBK) has maintained its benchmark lending rate at 8.75 percent, citing growing inflationary pressures fueled by rising global oil prices and heightened uncertainty stemming from the ongoing conflict in the Middle East.

The decision comes as Kenya's inflation rate climbed to 6.7 percent in May from 5.6 percent recorded in April, raising concerns about the cost of living and the broader economic outlook. According to the CBK, the increase in fuel prices linked to global market disruptions has contributed significantly to the rise in inflation.

In announcing the decision, the Monetary Policy Committee noted that keeping the policy rate unchanged will help anchor inflation expectations while supporting economic stability amid a challenging global environment.

The central bank also revised Kenya's economic growth forecast for 2026 downward to 4.9 percent from an earlier projection of 5.3 percent. The adjustment reflects concerns over global economic uncertainties, rising energy costs, and the potential impact of geopolitical tensions on trade and investment.

Economists say the decision signals the CBK's cautious approach as it balances the need to contain inflation against the importance of sustaining economic growth. A higher lending rate could have increased borrowing costs for businesses and households, while a lower rate risked further fueling inflation.

The Middle East conflict continues to pose a significant threat to global energy markets, with fears of supply disruptions pushing oil prices higher. For Kenya, a net importer of petroleum products, sustained increases in fuel prices could exert further pressure on inflation and household spending.

The CBK has indicated that it will continue to closely monitor domestic and international economic developments and take appropriate measures to ensure price stability and support the country's economic resilience.