December 10, 2025

Central Bank lowers base lending rate to 9%

Monetary Policy Committee of the Central Bank has, for the 9th consecutive time, cut the base lending rate from 9.25 per cent to 9 per cent

Monetary Policy Committee of the Central Bank has, for the 9th consecutive time, cut the base lending rate from 9.25 per cent to 9 per cent

The Monetary Policy Committee of the Central Bank has, for the 9th consecutive time, cut the base lending rate from 9.25 per cent to 9 per cent, signalling further monetary easing in the Kenyan market.

The committee, which sat for the final time this year, resolved to cut the base lending rate by 25 basis points, bringing the cumulative rate cut to 400 basis points, the highest interest rate cut in Kenya’s history.

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According to Central Bank Governor Kamau Thugge, the move will boost previous policy actions aimed at stimulating lending by banks to the private sector and supporting economic activity, with the Central Bank noting that lending to the private sector had improved to 6.3 per cent in November, up from 5.9 per cent in October.

The CBK further expressed optimism that the revised banking sector risk-based credit pricing model, which will be fully operational by March 2026, will improve the transmission of monetary policy decisions to commercial banks’ lending interest rates and enhance transparency in the pricing of loans by banks.

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