The Central Bank of Kenya reduced its Central Bank Rate by 75 basis points to 12.00% at its October 2024 Monetary Policy Committee meeting as policymakers noted that inflation had fallen to 3.6% and was expected to remain below the mid-point of the target range, and concluded that there was scope for further easing to support economic activity.
With inflation at 3.6% and economic activity slowing, the committee opted for a 75 basis point reduction.
INFLATION AND GROWTH BEHIND THE DECISION
The MPC judged that inflation would remain below the mid-point of its target range in the near term.
The committee cited slowing economic activity, including a deceleration in private-sector credit growth.
BACKGROUND
The CBR serves as the benchmark from which commercial bank lending rates in Kenya are derived.
The October 2024 decision was the CBK's second consecutive cut, following a 25 basis point reduction to 12.75% in August 2024. The CBK announced the decision in an MPC press release, and the MPC indicated it would continue to monitor developments and adjust the CBR as necessary to achieve its mandate.
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