Central Bank of Kenya cut its benchmark lending rate for the sixth meeting in a row on Tuesday but by a smaller margin, saying it wanted to provide further support to the economy.

The central bank rate was lowered by 25 basis points to 9.75 per cent, whereas its previous cut was by a larger 75 basis points

“There was scope for a further easing of the monetary policy stance to augment the previous policy actions aimed at stimulating lending by banks to the private sector and supporting economic activity,” the bank’s Monetary Policy Committee said in a statement.

Interviewed economists were divided on what the interest rate decision would be. Of seven forecasts, three were for a cut, three for no change and one for a hike.

The bank said it had revised down its 2025 economic growth forecast to 5.2 per cent from a 5.4 per cent forecast given at its last policy meeting in April “on account of higher tariffs on trade.”

It also forecast a current account deficit of 1.5 per cent of gross domestic product this year, narrower than the 2.8 per cent of gross domestic product deficit seen in April.

On the outlook for prices, it said inflation was expected to remain below the midpoint of its 2.5 per cent – 7.5 per cent target range in the near term.

The East African country’s public finances have been under strain because of heavy debt repayments and revenue underperformance.

It has applied for a new lending programme from the International Monetary Fund after abandoning the last review of a previous programme in March.

• A Reuters report