Kenya central bank cuts key rate again but by smaller margin

Kenya Cuts Interest Rate to 9.75% Amid Growth Pressures
The Central Bank of Kenya (CBK) announced on June 10 2025 that it has lowered its benchmark lending rate to 9.75 %, marking the sixth consecutive rate cut.
The decision comes as part of efforts to stimulate private‑sector activity in an economy facing slowing growth and fiscal constraints.
In its statement, the CBK’s Monetary Policy Committee said there was scope for a further easing of the monetary‑policy stance to augment the previous policy actions aimed at stimulating lending by banks to the private sector and supporting economic activity .
The bank also revised down its 2025 economic‑growth forecast to 5.2 %, from the 5.4 % estimate made in April, citing higher trade tariffs.
Meanwhile, the current‑account deficit is now projected at 1.5 % of GDP, an improvement from the 2.8 % forecast in April.
Reactions among analysts have been cautiously optimistic. On one hand, the rate cut signals a recognition that high domestic borrowing and weak private credit growth are hampering the economy. On the other hand, some warn that simply lowering rates may not be enough if banks remain reluctant to lend and structural headwinds persist. Indeed, Kenya’s public finances remain under strain, with heavy debt repayments and under‑performing revenue adding to pressure on the CBK’s policy room.
Looking ahead, the key question is whether the rate cut will translate into renewed private‑sector lending and broader economic activity. If banks respond and credit begins to flow more freely, the economy may benefit. But if lending remains subdued and external pressures mount, Kenya may require further policy support—or risk a longer‑than‑expected period of sluggish growth.