The Central Bank of Kenya (CBK) has announced a 0.75 percentage point reduction in its base lending rate, lowering it to 11.25%.
This move is part of the bank’s efforts to stimulate economic activity, amid stable inflation and exchange rate conditions.
Governor Kamau Thugge explained that the decision was driven by a slowdown in economic growth during the first half of 2024, highlighting the need for more accommodative monetary policies to spur growth.
“The reduction in the base rate is aimed at stimulating private sector credit by encouraging commercial banks to lower their lending rates,” Thugge stated.
He added that the bank expects this will ease access to credit, particularly for businesses and individuals, and help accelerate economic recovery.
Monitoring the Impact
The CBK’s Monetary Policy Committee (MPC) will continue to closely monitor the effects of this rate cut on inflation, economic activity, and credit uptake.
The committee has scheduled a reconvening in February 2025 to evaluate the impact of the new rate and decide on any additional measures.
