Kenya Central Bank Cuts Rate, Lowers GDP Forecasts

Kenya's central bank, led by Governor Kamau Thugge, has cut its benchmark lending rate for the sixth consecutive time, lowering it by 25 basis points to 9.75% to boost economic growth and encourage private sector lending. The move was supported by continued low inflation, which fell to 3.8% in May. The central bank revised its 2025 economic growth forecast downward to 5.2% from 5.4% and introduced a new lower 2026 forecast of 5.4% from 5.6%, reflecting uncertainty amid global risks. The Monetary Policy Committee observed a modest recovery in private sector credit growth and a decline in domestic lending rates. Economists were divided on the appropriateness of the rate cut. The central bank indicated it will continue to monitor economic conditions and is prepared to adjust policy if needed.