The Central Bank of Kenya (CBK) has retained the Central Bank Rate (CBR) at 8.75 percent for the second consecutive time, following its Monetary Policy Committee (MPC) meeting on June 9, 2026.
The regulator said the move is aimed at anchoring inflation expectations in the face of rising global and domestic price pressures.
Kenya’s inflation has edged upward, driven largely by higher energy costs linked to global oil price increases. Headline inflation rose to 6.7 percent in May 2026, up from 5.6 percent in April, while non‑core inflation jumped to 16.0 percent from 13.4 percent, reflecting surging fuel, gas and food prices.
“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,” the MPC stated.
The committee cited geopolitical tensions in the Middle East and the ongoing Russia‑Ukraine conflict as key drivers of global supply chain disruptions, which have pushed up energy prices and transport costs. Global growth is projected to slow to 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.
ALSO READ:
NSSF declares Ksh715 billion assets, urges workers to save against old‑age poverty
Domestically, inflation has remained within the government’s target band of 5 ± 2.5 percent, despite recent increases. Core inflation rose to 3.2 percent in May from 2.8 percent in April, mainly due to transport costs. Processed food inflation remained stable, supported by lower sugar and maize prices, though vegetables such as tomatoes and cabbages stayed elevated.
CBK expects inflation to remain within target in the near term, assuming global oil prices stabilise and domestic conditions remain supportive, including favourable weather and a steady exchange rate. “The Committee noted that overall inflation is expected to remain within the target range in the near term, assuming a de‑escalation of the conflict in the Middle East,” the statement added.
Ahead of the MPC meeting, commercial banks had signalled pressure for tighter monetary policy, citing rising inflation risks and uncertainty in global energy markets. The Kenya Bankers Association (KBA) warned that inflation expectations were becoming unanchored and urged the CBK to act decisively.
CBK Governor Kamau Thugge said the bank will continue monitoring global oil prices, inflation trends and second‑round effects on the economy, and remains ready to adjust policy if necessary. “The Committee will meet again in August 2026,” he noted.
By Masaki Enock
Get more stories from our website: Sacco Review.
For comments and clarifications, write to: Saccoreview@
Kindly follow us via our social media pages on Facebook: Sacco Review Newspaper for timely updates
Stay ahead of the pack! Grab the latest Sacco Review newspaper!
