CBK Reveals Measures Set to Keep Kenya’s Inflation in Check

Kenya’s inflation is expected to stay within the Central Bank’s target range in the coming months, despite pressure from high energy prices and rising global risks, CBK Governor Dr Kamau Thugge said.

Thugge said the outlook would be supported by monetary policy measures, government interventions to cushion consumers from higher fuel costs and stability in the exchange rate.

Fuel Measures to Cushion Consumers

The Governor pointed to subsidies and the reduction of VAT on fuel as some of the measures expected to keep price pressures in check.

He said the interventions would help limit the impact of higher energy costs on households and businesses, while a stable shilling would reduce the cost of imported goods.

“Overall inflation is expected to remain within the 5 plus or minus 2.5 percent target range in the near term,” Thugge said, adding that the outlook would be supported by “appropriate monetary policy actions.”

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He said government measures, including subsidies and reduced VAT on fuel, would also help contain price increases.

Exchange rate stability is expected to provide another buffer, with Thugge noting that it should continue to moderate the impact of imported inflation.

The Governor said the September 2026 Monetary Policy Committee surveys showed inflation expectations remained well anchored within the target range despite the pressure from energy prices.

Global Conflicts Pose Fresh Risks

Thugge, however, warned that the inflation outlook remains exposed to developments outside Kenya, particularly geopolitical tensions that could disrupt global supply chains and push up commodity prices.

“The main risks to the inflation outlook relate to heightened geopolitical risk, again the conflict in the Middle East and also the continued conflict between Ukraine and Russia,” he said.

He also pointed to possible supply chain disruptions and renewed pressure on food prices linked to the anticipated El Niño conditions.

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The remarks come as Kenya continues to face pressure from higher food, transport and energy costs, making the direction of inflation a key concern for households and businesses.

For now, CBK expects the combination of monetary policy, government interventions and a stable exchange rate to keep inflation within its target range, even as global developments remain a risk to the outlook.

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Central Bank of Kenya headquarters in Nairobi. CBK has licensed 29 additional digital credit providers, bringing the total number of licensed DCPs to 281. PHOTO/ Nairobi Leo