The Central Bank decides on Wednesday whether loans get dearer. Banks want the rate held at 8.75 per cent, but inflation has risen for three months in a row
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The Central Bank decides on Wednesday whether loans get dearer. Banks want the rate held at 8.75 per cent, but inflation has risen for three months in a row.
The Central Bank of Kenya's Monetary Policy Committee meets on Wednesday 7 October to set the Central Bank Rate, the benchmark that feeds into what banks charge for loans and overdrafts. The rate has been 8.75 per cent since a quarter-point cut in February.
The case for holding
The Kenya Bankers Association has asked the committee to leave the rate alone. "With inflation within the target range, and exchange rate stability sustained, sustaining the current stance of monetary policy to anchor the recovery in private sector credit and economic activity is appropriate," it said. Foreign reserves stood at about $15 billion, or 6.1 months of imports, at the end of September, and the shilling has held at about Sh129.70 to the dollar for weeks.
The case for raising
Inflation rose to 6.8 per cent in September, from 6.6 per cent in August, the third rise in a row. Food inflation is 9.5 per cent and transport costs are up 15.6 per cent on a year ago, with oil above $100 a barrel., citing Bloomberg, reported that Kenya is among the countries expected to raise rates this month. The Central Bank's target band is 2.5 to 7.5 per cent.
Other numbers
Treasury bills at Monday's auction: 91-day 8.77 per cent, 182-day 8.89 per cent, 364-day 9.04 per cent. Last week's auction drew Sh47.7 billion of bids for Sh28 billion on offer.
Banks' loans to customers grew only 6.6 per cent in 2025, to Sh3.9 trillion, while their holdings of Government securities grew 18.2 per cent, to Sh2.5 trillion, according to the Central Bank's 2025 bank supervision report.
The economy grew 5.3 per cent in the first quarter of 2026.
What it means for your pocket
If the rate is held, bank loan and overdraft rates should stay roughly where they are. Banks have been slow to cut, so do not expect relief either way.
If the rate rises, new loans and loans with variable rates get dearer. Fixed-price mobile loans are not directly tied to the rate.
Treasury bills are paying close to 9 per cent, more than most savings accounts. They can be bought through a bank, a stockbroker or the Central Bank's DhowCSD platform. This is information, not advice.
The decision is usually announced on Wednesday afternoon. KNN will report it.
Sources: Central Bank of Kenya (meeting date), Central Bank of Kenya (Treasury bill rates), Eastleigh Voice (bankers' statement), The Star (last week's auction), The Standard (bank lending figures).
That was a Kibra News Network report, read by an A I voice.
The Central Bank of Kenya’s Monetary Policy Committee meets on Wednesday 7 October to set the Central Bank Rate, the benchmark that feeds into what banks charge for loans and overdrafts. The rate has been 8.75 per cent since a quarter-point cut in February.
The case for holding
The Kenya Bankers Association has asked the committee to leave the rate alone. “With inflation within the target range, and exchange rate stability sustained, sustaining the current stance of monetary policy to anchor the recovery in private sector credit and economic activity is appropriate,” it said. Foreign reserves stood at about $15 billion, or 6.1 months of imports, at the end of September, and the shilling has held at about Sh129.70 to the dollar for weeks.
The case for raising
Inflation rose to 6.8 per cent in September, from 6.6 per cent in August, the third rise in a row. Food inflation is 9.5 per cent and transport costs are up 15.6 per cent on a year ago, with oil above $100 a barrel. Kenyans.co.ke, citing Bloomberg, reported that Kenya is among the countries expected to raise rates this month. The Central Bank’s target band is 2.5 to 7.5 per cent.
Other numbers
Treasury bills at Monday’s auction: 91-day 8.77 per cent, 182-day 8.89 per cent, 364-day 9.04 per cent. Last week’s auction drew Sh47.7 billion of bids for Sh28 billion on offer.
Banks’ loans to customers grew only 6.6 per cent in 2025, to Sh3.9 trillion, while their holdings of Government securities grew 18.2 per cent, to Sh2.5 trillion, according to the Central Bank’s 2025 bank supervision report.
The economy grew 5.3 per cent in the first quarter of 2026.
What it means for your pocket
If the rate is held, bank loan and overdraft rates should stay roughly where they are. Banks have been slow to cut, so do not expect relief either way.
If the rate rises, new loans and loans with variable rates get dearer. Fixed-price mobile loans are not directly tied to the rate.
Treasury bills are paying close to 9 per cent, more than most savings accounts. They can be bought through a bank, a stockbroker or the Central Bank’s DhowCSD platform. This is information, not advice.
The decision is usually announced on Wednesday afternoon. KNN will report it.
KNN Newsroom is the staff byline for stories written, rewritten and edited at the Kibra News Network desk. Where a story credits an outside outlet, the original source is linked at the foot of the piece.
