The Central Bank of Kenya (CBK) has maintained its benchmark interest rate at 8.75 per cent as global inflationary pressures increase, driven by rising energy and food prices.
The Monetary Policy Committee (MPC) retained the Central Bank Rate (CBR) during its meeting on October 7, 2026, saying the current policy remains appropriate to keep inflation within the target range and support stability in the Kenya shilling.
The CBK expects inflation to remain within its target range in the near term, supported by monetary policy measures, government interventions and a stable exchange rate. However, rising international prices continue to pose risks to the economic outlook.
The Kenya shilling remained relatively stable against major international and regional currencies during the week ending October 8. The currency exchanged at KSh129.94 against the US dollar, compared with KSh129.71 on October 1.
Foreign exchange reserves stood at $14.736 billion as of October 8, equivalent to 5.9 months of import cover. Although reserves declined from $14.93 billion recorded on October 1, they remained above the CBK’s statutory requirement of at least four months of import cover.
The domestic money market also remained liquid, with commercial banks holding average excess reserves of KSh23.3 billion above the required cash reserve ratio. The Kenya Shilling Overnight Interbank Average (KESONIA) remained stable at 8.75 per cent.
Government securities attracted strong investor demand. Treasury bill bids reached KSh75.4 billion against an advertised amount of KSh28 billion on October 8, representing a performance of 269.3 per cent. Interest rates on the 91-day, 182-day and 364-day Treasury bills declined during the auction.
At the Nairobi Securities Exchange, market performance was mixed during the week. The Nairobi All Share Index (NASI) fell by 0.60 per cent, while the NSE 25 Share Index declined by 0.27 per cent. The NSE 20 Share Index, however, gained 0.11 per cent.
Market capitalization dropped by 0.60 per cent, while equity turnover declined by 6.65 per cent. Despite the lower turnover, the total number of shares traded increased by 51.37 per cent. Trading in domestic bonds also weakened, with turnover falling by 40.80 per cent.
International developments continued to influence market conditions. Euro area annual inflation rose to 3.8 per cent in September from 3.2 per cent in August, largely due to higher energy prices. In the United States, unemployment increased slightly to 4.2 per cent from 4.1 per cent.
Meanwhile, Murban crude oil prices climbed to $101.67 per barrel on October 8 from $95.76 a week earlier, reflecting supply concerns linked to geopolitical tensions in the Middle East. Gold prices moved in the opposite direction, falling to $4,133.93 per ounce from $4,177.76.
The CBK’s latest weekly bulletin shows that Kenya’s monetary authorities are maintaining a cautious approach as they balance domestic price stability against growing international economic pressures.