The Central Bank of Kenya (CBK) on Tuesday lowered its benchmark lending rate by 25 basis points, saying there was still room to further ease monetary policy as inflation remains well below target.
The key rate was reduced to 9.50% from 9.75%, marking the seventh consecutive cut.
The decision aligns with the median forecast from a Reuters poll of economists.
Annual consumer price inflation rose to 4.1% in July from 3.8% the previous month, but remains well within the central bank’s target range of 2.5% to 7.5%.
While inflationary pressures remain contained, the East African nation’s public finances are still under strain due to large debt repayments and lower-than-expected revenues.
The CBK maintained its economic growth forecasts for this year and next at 5.2% and 5.4% respectively.
It also kept its projection for this year’s current account deficit at 1.5% of gross domestic product (GDP), compared with 1.3% of GDP last year.
