CBK Retains Policy Rate at 8.75% After October 7 Meeting
Updated October 8, 2026: CBK retained the rate at 8.75% on October 7.
The Central Bank of Kenya’s Monetary Policy Committee (MPC) met on Wednesday, October 7, 2026 and decided to retain the Central Bank Rate (CBR), currently at 8.75%.
The decision follows KNBS figures showing that Kenya’s annual inflation increased to 6.8% in September, up from 6.6% in August.
Where the Central Bank Rate Stands
The MPC retained the CBR at 8.75% at its August 11 meeting. The rate had earlier been reduced to 8.75% in February 2026 and was subsequently held at that level in April, June and August.
The CBR is the policy rate used by CBK to signal the stance of monetary policy. Changes in the rate can influence borrowing conditions across the financial system, although the effect on individual bank and loan-app rates is not immediate or identical.
Inflation Is One of the Main Indicators to Watch
September inflation rose to 6.8%, with food prices up 9.5% over the year and transport prices up 15.6%, according to KNBS.
Inflation is important to monetary policy because CBK’s mandate includes maintaining price stability. However, one month’s inflation reading does not by itself determine the MPC decision.
Related: Kenya inflation rises to 6.8% in September 2026.
What CBK Was Watching in August
At the August meeting, the MPC highlighted elevated global energy prices, uncertainty linked to the Middle East conflict, domestic inflation, the exchange rate, bank lending rates and private-sector credit growth.
The Committee said average bank lending rates had been declining and private-sector credit growth was improving, while maintaining that the existing policy stance was appropriate at that time.
Why Borrowers Should Pay Attention
A change in the CBR can influence the direction of funding costs and lending rates in the banking system. If the policy rate changes, banks may adjust pricing over time depending on their funding costs, risk assessments, loan type and pricing model.
Borrowers should therefore avoid assuming that an MPC decision will immediately change the instalment on an existing loan. The effect depends on the loan contract and whether the interest rate is fixed, variable or linked to a reference rate.
Why Savers and Businesses Should Also Watch
Monetary policy can also influence deposit rates, Treasury-bill yields, business financing costs and investment decisions. For businesses, the direction of borrowing costs can affect expansion plans and working-capital financing.
For savers and investors, market interest rates can affect returns available on deposits and government securities, although those rates are determined by more than the CBR alone.
Why Did the MPC Hold the Rate?
The MPC decided to retain the policy rate at 8.75%. Its October 7 statement cited rising global energy and food prices, uncertainty in international markets and the potential impact of El Niño rains as risks to the outlook.
The decision was based on the Committee’s assessment of current inflation, inflation expectations, economic activity, credit conditions, the exchange rate, global developments and other risks available at the time of the meeting.
When Is the Next MPC Meeting?
CBK published its decision on October 7 and said the committee would meet again in December 2026. It will continue assessing oil prices, inflation and domestic economic conditions.
Daily Report KE updated this article after CBK released the October decision on October 7.
