CBK Cuts Base Lending Rate To 8.75%, 10Th Time In A Row

By Robai Ludenyi

The Central Bank of Kenya (CBK) has cut its benchmark lending rate once again, dropping it to 8.75%, marking the tenth consecutive reduction in a move aimed at boosting lending and stimulating economic activity. The decision signals CBK’s continued effort to support businesses and households struggling with high borrowing costs after a tough economic period.

The announcement sounds like good news. Lower interest rates are expected to make loans cheaper, encouraging banks to lend more to businesses and individuals. In theory, this should help traders restock their shops, manufacturers expand production, and families access credit for school fees, housing, or emergencies.

CBK’s move is also meant to push banks to support the private sector, which has complained for months about expensive credit. Small and medium-sized businesses, which employ millions of Kenyans, have been particularly affected by high interest rates. By lowering the benchmark rate, CBK hopes banks will follow suit and reduce loan charges.

However, the impact of the rate cut may not be felt immediately. Some business owners say that despite previous reductions, borrowing remains difficult. Banks are still cautious, tightening lending conditions due to fear of loan defaults and economic uncertainty. As a result, many traders feel the policy decisions made in Nairobi are yet to fully reflect in their daily business operations.

Economists say repeated rate cuts show CBK’s confidence that inflation is under control. Stable prices give room for monetary easing without risking a spike in the cost of living. If inflation remains steady, banks may slowly gain confidence to lend, allowing businesses to invest and create jobs.

The big question now is whether banks will pass on the benefits to customers. Kenyans will be watching closely to see if loan rates drop, approval processes ease, and credit becomes accessible beyond large corporations. How fast this relief reaches ordinary traders and households will determine whether the rate cut truly delivers economic growth or remains just a policy headline.

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