The Kenya Bankers Association (KBA) has urged the Central Bank of Kenya (CBK) to keep the Central Bank Rate (CBR) unchanged at 8.75% in its upcoming Monetary Policy Committee (MPC) meeting scheduled for April, 8, 2026, citing imminent inflationary and potential exchange rate pressure stemming from the Middle East conflict.
KBA noted that despite inflation remaining within the CBK’s target range, it is likely to rise due to the pass-through effects of global oil price hikes and geopolitical disruptions on supply routes. As of March 2026, Kenya’s overall inflation stood at 4.4%, up from 4.3% in February, driven by increases in food and electricity costs. The US-Iran conflict has disrupted key oil transit routes, including the Strait of Hormuz, one of the world’s most critical oil passage, leading to supply constraints and upward pressure on prices.
The Banker’s association also pointed that Kenya’s economic outlook remains exposed to global shocks, including conflicts in key regions such as the Gulf and Ukraine. These developments continue to affect trade flows, commodity prices, and overall macroeconomic stability. In the third quarter of 2025, Kenya’s economy grew by 4.9%, supported by strong performance in both industrial and services sectors.
KBA further stated that while earlier monetary easing has supported credit market activity, the transmission of interest rates changes remains constrained by structural inefficiencies in the lending environment, limiting full impact of policy changes in the economy.
The banking lobby noted that recovery in the private sector lending is ongoing but remains weak, weighed down by high lending costs and elevated risks. Lending to the private sector improved to 6.4% in January 2026, from 5.9% in December 2025.
The association also highlighted that exchange rate stability faces risks of a widening current account deficit and potential disruptions on diaspora remittances, arising from the prolonged geopolitical conflicts. According to the CBK’s weekly bulletin, the Kenya shilling exchanged at KES 129.99 per U.S dollar on April 2, 2026.
KBA’s View on the CBR
Given the balance of risks, KBA concluded that maintaining the policy rate would be ideal to help anchor inflation.
Read: CBK Cuts Policy Rate to 8.75% in Tenth Consecutive Move
