Central Bank of Kenya Cuts Rate to 9.75%, Returning to Single Digits for First Time Since 2023

The Central Bank of Kenya reduced its central bank rate by 25 basis points to 9.75% at its June 2025 meeting, bringing the policy rate below double digits for the first time since May 2023. The decision reflects the Monetary Policy Committee's assessment that the benign inflation outlook provides space to continue the easing cycle that has been under way in Kenya, with the lower rate intended to support credit conditions and domestic economic activity.

GROWTH FORECAST TRIMMED TO 5.2%

Alongside the rate decision, the Central Bank of Kenya revised its GDP growth forecast for 2025 down to 5.2% from 5.4%, citing the impact of higher tariffs on trade.

Inflation was 3.8% in May, below the midpoint of the CBK's 5±2.5% target range.

EASING CYCLE

The June cut is part of an easing cycle being conducted by the Central Bank of Kenya.