April 7, 2025 – Nairobi, Kenya — The Central Bank of Kenya (CBK) is expected to hold its benchmark interest rate steady at 10.75% during its upcoming Monetary Policy Committee (MPC) meeting on April 8. The decision comes as the Bank continues to walk a tightrope between stimulating economic growth and keeping inflation within manageable levels.
The current rate, set in February 2025 following a 50-basis-point cut, was aimed at boosting lending and reviving private sector credit flow in the face of economic headwinds. Analysts, however, suggest that the CBK may consider further easing by May, potentially bringing the Central Bank Rate (CBR) down to 10.00% and possibly 9.50% by the third quarter of the year—if inflation remains under control.
Inflation Trends Within Target Range
Kenya’s inflation rate rose to 3.5% in February, up slightly from previous months, but still comfortably within the CBK’s preferred range of 2.5% to 7.5%. Despite the increase, policymakers view current inflationary pressures as manageable, particularly in comparison to neighboring economies experiencing higher rates of currency depreciation and food price volatility.
“This cautious stance by the CBK reflects its intention to maintain price stability while not derailing the slow but steady economic recovery,” said Miriam Ndegwa, an economist with Capital Edge Advisory.
Regional Economic Pressures
The CBK’s decision also factors in wider regional dynamics. Across East Africa, central banks have faced growing pressure to balance inflation control with the need to support post-COVID economic growth and address lingering effects of global supply disruptions and climate-related agricultural challenges.
Kenya’s shilling has shown signs of stability in recent months, thanks in part to improved export earnings and diaspora remittances. A premature or aggressive rate cut could trigger capital outflows, something the CBK is keen to avoid.
Outlook: Easing on the Horizon?
While the Bank is expected to hold rates steady for now, market watchers see room for gradual monetary easing as inflationary threats recede and economic activity strengthens.
“The signals are clear: if inflation stays on track and the currency remains stable, we’re likely to see a rate cut by May,” said Charles Wekesa, an investment strategist at Jubilee Wealth Partners. “But the CBK will move cautiously. They don’t want to loosen too quickly and risk undoing recent progress.”
For now, the focus remains on stability—with the CBK taking a deliberate, measured approach to its monetary policy toolkit. The April MPC meeting will provide more insight into how the Bank plans to balance its dual mandates of price stability and economic growth in 2025.
