(MENAFN) The Central Bank of Kenya (CBK) has reduced its benchmark lending rate from 9.75 percent to 9.5 percent to stimulate economic activity and encourage private-sector lending, according to reports.

CBK Governor Kamau Thugge, who led the Monetary Policy Committee (MPC) meeting, stated that there is room for further monetary easing to support earlier measures aimed at expanding bank credit, promoting growth, and maintaining stable inflation and exchange rates.

“Growth in credit to key sectors of the economy, particularly manufacturing, trade, building and construction, and consumer durables, improved in June and July,” Thugge noted in a statement from Nairobi.

The MPC also observed that central banks in major economies are gradually lowering interest rates, though at a cautious and uneven pace depending on inflation and growth conditions.

Kenya’s overall inflation rose to 4.1 percent in July from 3.8 percent in June, staying below the 5 percent mid-point of the target range. The central bank affirmed that it will closely monitor the effects of the rate cut and evolving global and domestic economic conditions and is prepared to take further action as needed.

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