Kenya is among the countries expected to increase interest rates this month as central banks worldwide respond to renewed inflationary pressures and shifting economic conditions.

The Central Bank of Kenya is set to hold its Monetary Policy Committee meeting on Wednesday, 7 October, where policymakers will decide whether to keep or adjust the current Central Bank Rate of 8.75 per cent.

The rate has been unchanged since the August meeting, after a 25‑basis‑point cut from 9 per cent in February.

September’s annual inflation rose to 6.8 per cent from 6.6 per cent in August, driven primarily by food (9.5 per cent) and transport (15.6 per cent) price increases.

Despite the rise, overall inflation remains within the CBK’s target band of 2.5 to 7.5 per cent.

The Kenya Bankers Association has urged the central bank to retain the 8.75 per cent rate, arguing that a stable policy rate would support private‑sector credit recovery and sustain economic activity.

The association also warned that higher fuel and food prices, rising production and transport costs, weaker global growth and expected El Niño rains could weigh on activity if rates rise.

A rate increase would make borrowing more expensive, potentially slowing credit growth for households and businesses at a time when the economy is recovering.

Policymakers must balance the need to curb inflation against the risk of weakening credit expansion as they consider tightening monetary policy on 7 October.