CBK Cuts Base Lending Rate to 9.5% Amid US Inflation Stability and Kenyan Debt Concerns

The Central Bank of Kenya (CBK) has reduced its base lending rate by 25 basis points to 9.5 percent, effective August 12. This decision aims to stimulate economic activity and lower borrowing costs amidst a recovering economy. In a separate development, US inflation remained steady in July, which has boosted expectations for a potential interest rate cut by the Federal Reserve next month, despite rising underlying prices. This comes as Kenya grapples with a soaring debt burden and its impact on the nation’s ability to fund essential services. As debt servicing costs consume a significant portion of its revenue, Kenya faces tough choices in prioritizing public spending.