The Central Bank of Kenya has retained the Central Bank Rate at 8.75 percent. The decision is part of the bank’s efforts to maintain economic and price stability.
The latest CBK information shows that Kenya’s inflation rate stood at 6.8 percent in September 2026. The average lending rate was 14.34 percent in August. Central Bank of Kenya Keeping the rate unchanged provides some stability for banks, businesses and borrowers.
The decision will be closely watched because interest rates affect the cost of loans for households and businesses.
Kenya and Rwanda have signed 11 bilateral agreements aimed at strengthening cooperation between the two countries. The agreements were concluded during the 10th session of the Joint Permanent Commission for Cooperation.
The agreements cover areas including immigration, water resources, conservation, housing, culture, justice and local governance. The two countries also want to expand cooperation in trade, transport, ICT, tourism and investment.
Kenyan coffee farmers earned approximately Sh41.6 billion during the 2025/26 coffee season. The money came from coffee sold through the Nairobi Coffee Exchange.
The earnings represent an improvement compared with the previous season. Coffee remains an important source of income for thousands of farmers, particularly in central and western parts of Kenya.
The stronger earnings are being welcomed by farmers and the wider agricultural sector. The government has continued encouraging farmers to improve production and quality so that Kenyan coffee can remain competitive in international markets.
The Central Bank of Kenya (CBK) has retained its benchmark Central Bank Rate (CBR) at 8.75 percent, citing the need to keep inflation expectations anchored while supporting stability in the foreign exchange market.
The decision was reached by the Monetary Policy Committee (MPC) during its meeting on October 7, 2026, as the committee assessed developments in inflation, economic growth, the exchange rate and global economic conditions.
The MPC noted that Kenya’s overall inflation rose to 6.8 percent in September, up from 6.6 percent in August, but remained within the government’s target range. The increase was largely attributed to higher prices of food and energy.
Core inflation also increased to 4.0 percent in September from 3.4 percent in August, driven mainly by higher prices of processed food products, including milk, wheat products and edible oils. However, non-core inflation declined to 14.0 percent from 14.7 percent, reflecting lower vegetable prices, despite continued pressure from fuel and energy costs.
The committee said government interventions, including subsidies and the temporary reduction of VAT on fuel, had helped ease some inflationary pressures.
Photo: Central Bank of Kenya
The CBK has revised upwards its projection for Kenya’s economic growth in 2026 to 5.0 percent, from an earlier estimate of 4.9 percent.
The stronger outlook is mainly supported by improved performance in the industry and services sectors. Economic growth is projected to remain strong in 2027 at 5.3 percent.
However, the CBK warned that the outlook remains exposed to risks, particularly prolonged geopolitical tensions, uncertainty over global trade policies and the potential effects of the El Niño weather phenomenon.
The committee said surveys conducted in September showed continued optimism among businesses about economic activity over the next 12 months. Respondents attributed the optimism to macroeconomic stability, increased government infrastructure spending, digital innovation and improved private-sector credit growth.
Businesses, however, remained concerned about elevated energy costs linked to the conflict in the Middle East and possible disruptions from El Niño-related weather conditions.
Image: Central Bank of Kenya
The country’s current account deficit widened to an estimated 3.1 percent of GDP in the 12 months to August 2026, compared with 2.1 percent during a similar period in 2025.
The CBK attributed the widening deficit largely to a higher trade deficit and lower secondary income transfers as a share of GDP.
Goods exports increased by 11.8 percent, supported mainly by horticulture, tea, machinery and transport equipment. At the same time, goods imports grew by 15.8 percent, driven by higher imports of food, mineral fuels and intermediate and capital goods.
Services receipts rose by 8.7 percent, mainly on the back of increased travel services receipts, while diaspora remittances declined by 1.3 percent.
The CBK expects the current account deficit to widen further to about 3.2 percent of GDP in 2026, mainly because of increased mineral-fuel imports following higher international oil prices and lower remittance inflows.
Image: Central Bank of Kenya
Despite the external pressures, Kenya’s foreign exchange reserves remained at a comfortable level.
The CBK said official reserves stood at approximately US$14.702 billion, equivalent to 5.9 months of import cover.
The reserves, the committee said, continue to provide an adequate buffer against short-term domestic and external economic shocks.
The CBK also noted that the current account deficit is expected to be fully financed by financial and capital account inflows, resulting in an overall balance of payments surplus of about US$2.426 billion in 2026.
The banking sector continued to record strong liquidity and capital adequacy, although the ratio of gross non-performing loans (NPLs) to gross loans stood at 13.9 percent in September 2026.
This was an improvement from 14.8 percent in June 2026 and 17.6 percent in August 2025.
The CBK said reductions in non-performing loans were recorded in the financial services, agriculture, trade, and energy and water sectors, while banks continued to maintain adequate provisions against bad loans.
Commercial banks’ lending to the private sector also remained strong, with credit growth reaching 10.6 percent in September, compared with 10.3 percent in August and -2.9 percent in January 2025.
The growth was particularly evident in trade, building and construction, agriculture, finance and insurance, as well as consumer durables.
CBK maintains policy stance
The MPC also noted the ongoing implementation of the FY2026/27 Government Budget and the planned fiscal consolidation strategy aimed at reducing Kenya’s debt vulnerabilities over the medium term.
After considering the economic developments, the committee concluded that maintaining the CBR at 8.75 percent was appropriate.
The CBK said the current monetary policy stance would help ensure that inflation expectations remain anchored within the target range while supporting stability in the exchange rate.
The Kenyan shilling remained relatively stable against major international currencies on Wednesday, according to the latest daily exchange rates published by the Central Bank of Kenya (CBK).
The CBK’s indicative rates put the US dollar at KSh129.89, up slightly from KSh129.79 recorded on October 6. The British pound was quoted at KSh172.28, while the euro stood at KSh146.11.
The Japanese yen was quoted at KSh82.15 for 100 yen, while regional currencies also recorded the following indicative values:
Ugandan shilling: KSh31.21 per 100 UGX
Tanzanian shilling: KSh20.24 per 100 TZS
Rwandan franc: KSh11.34 per 100 RWF
South African rand: KSh7.84
The latest figures indicate a modest movement in the shilling against the dollar. The dollar rate rose by about 10 cents from Tuesday’s KSh129.79, continuing a relatively narrow trading range in recent weeks. Historical data shows the CBK dollar mean rate was KSh129.71 on October 1 and KSh129.76 on October 5.
The CBK describes its published exchange rate as an indicative market rate calculated from weighted-average spot trades in the interbank foreign-exchange market. The rate is market-determined rather than fixed by the central bank, with supply and demand influencing the value of the shilling. Commercial banks and foreign-exchange bureaus may therefore offer rates that differ from the CBK’s indicative figure.
The exchange-rate update comes as the CBK continues to monitor domestic inflation and financial-market conditions. On Wednesday, the central bank kept its benchmark lending rate unchanged, saying inflation was expected to remain within its target range in the near term.
For Kenyan consumers and businesses, movements in the exchange rate remain important for the cost of imported goods, international travel, foreign-currency payments and remittances. Exporters and recipients of foreign currency, meanwhile, may benefit when major currencies strengthen against the shilling.
Source: Central Bank of Kenya daily exchange rates, October 7, 2026.
The government has identified 109 organized criminal gangs and groups across Kenya as it steps up security ahead of the 2027 General Election.
Interior Principal Secretary Raymond Omollo revealed today that the number has risen from 89 gangs declared illegal in 2016.
Speaking during a security briefing, PS Omollo said Western Kenya has the highest number with 38 groups, followed by Rift Valley with 22 and Nairobi with 20. Nyanza has 12 and Coast 11.
He warned that youth groups are being recruited to perpetrate violence and intimidation ahead of elections.
The PS said security agencies have mapped all groups and will not allow them to disrupt peace. He called on parents and leaders to guide youth against joining criminal gangs.
Kenya has today, October 6th 2026, confirmed its first ever case of Bundibugyo Ebola virus disease, with the patient dying last night at Nairobi Hospital.
In a statement, Health Cabinet Secretary Aden Duale said the patient was a Kenyan citizen who had lived in the Democratic Republic of Congo for the past seven years.
The CS said the man fell ill about a month ago while in DRC and was treated at several hospitals before traveling back to Kenya. He traveled by road from DRC to Kampala in Uganda, then boarded Jambojet Flight 8523 arriving at Jomo Kenyatta International Airport on October 3rd.
Upon arrival, a relative drove him directly from JKIA to Nairobi Hospital where he was quickly placed in an isolation facility.
He presented with fever, chills, intense fatigue, muscle pain, painful swallowing, sore throat and bleeding under the skin at injection sites. Doctors suspected viral hemorrhagic fever and collected samples which tested positive at both the National Virology Reference Laboratory and KEMRI Laboratory.
The patient died on Monday night October 5th despite treatment. Arrangements for safe and dignified burial are ongoing today.
The Ministry has listed 28 contacts including family members and health workers, and is pursuing 23 passengers and 4 crew members from the same flight. Quarantine arrangements are underway and border points are on high alert.
Kenyans are urged to maintain strict hygiene and report any symptoms.
Germany has pledged over €1 billion in military aid to Ukraine during a surprise visit by its chancellor. The move comes amid intensified Russian attacks.
The aid will support Ukraine’s defense and infrastructure repairs. European leaders continue to emphasize unity against ongoing aggression.
Severe flooding in Catalonia has left streets submerged and caused significant damage. At least two people have died, and emergency services responded to over 1,500 calls.
Authorities are warning residents to remain cautious as heavy rains continue. Climate experts link the extreme weather to broader environmental changes.
