By David Herbling | Updated on Oct 07, 2026 at 03:23 PM
Kenya’s central bank kept its benchmark rate unchanged as policymakers took a wait-and-see approach in assessing what impact energy shocks stemming from the Iran war will have on the economy and inflation.
The monetary policy committee left the rate unchanged at 8.75%, Governor Kamau Thugge said in an emailed statement on Wednesday. That matched the forecast of three out of five economists in a Bloomberg survey. The other two expected a 25 basis points hike.
“The MPC noted that there is need to continue monitoring the evolution of global oil prices and any second-round effects on inflation, as well as other developments in the global and domestic economies,” Thugge said in the statement.
Other African central banks have adopted a mixed approach toward inflationary pressures arising from the Middle East conflict. Borrowing costs were recently left unchanged in countries including Ghana, Botswana, Egypt and Morocco, raised in South Africa and cut in Nigeria and Zambia.
Kenya’s annual inflation ticked up to 6.8% in September from 6.6% the month before. Core inflation, the central bank’s preferred gauge of underlying price growth, was at 4% — the highest since the East African nation began tracking the metric.
The inflation rate has breached the 5% midpoint of the central bank’s target range, where Thugge prefers to firmly anchor price-growth expectations, since April. Volatile energy prices, weather-related shocks and global supply-side challenges threaten to add to the pricing pressures.
The central bank raised its economic growth expectations for this year to 5% from 4.9% and kept its forecast for 2027 at 5.3%.
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