Kenya Central Bank Reduces Main Lending Rate to 12% – Reuters

Kenya’s central bank announced a reduction in its benchmark lending rate to 12.00% from the previous 12.75%. The decision, made by the monetary policy committee (MPC), aims to enhance credit flow to the private sector.

This marks the second rate cut this year, with the first decrease occurring in August, when the rate was lowered by 25 basis points—its first reduction in nearly four years.

Recently, Finance Minister John Mbadi expressed that the central bank should continue reducing its lending rate in light of decreasing inflation rates observed in recent months.

Prior to this decision, the Kenya Bankers’ Association indicated in a research note that there was an opportunity for a significant policy rate cut to stimulate economic growth and revive private sector credit expansion.

The MPC acknowledged a marked slowdown in private sector credit growth, especially during the second quarter of 2024, and concluded that there is room for further easing of monetary policy to support economic recovery.