Kenya inflation falls to 4.3% in February, easing pressure on interest rates

2026-02-27 10:30:39

Kenya’s annual inflation eased to 4.3% in February 2026, down from 4.4% in January, giving the Central Bank of Kenya (CBK) greater room to consider additional interest rate cuts.

The data was published on Friday by the Kenya National Bureau of Statistics (KNBS) in its latest Consumer Price Index and Inflation Report.

The CBK has consecutively reduced borrowing costs in 10 straight meetings since August 2024, as inflation has consistently remained below the 5% target.

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What the data is saying

The report shows that the general price level in February 2026 was 4.3 per cent higher than in February 2025, reflecting a moderation in price pressures across key sectors.

Prices of items in Food and Non-Alcoholic Beverages rose by 7.3 per cent over the year.
Transport costs increased by 4.0 per cent, while Housing, Water, Electricity, Gas, and other fuels rose by 1.8 per cent.

These three divisions together account for over 57 per cent of the total weight across the 13 major expenditure categories in the CPI.

Monthly movements in food prices showed mixed trends.

“Between January 2026 and February 2026, prices of selected food commodities showed mixed movements. The price of sugar declined from KSh 174.17 to KSh 166.56 per kilogramme, while that of a kilogramme of mangoes declined from KSh 149.09 to KSh 144.37. The price of one kilogramme of tomatoes declined from KSh 87.98 to KSh 87.90,” KNBS noted.

Core inflation, which excludes volatile items such as fresh food and fuel, also moderated, falling to 2.1 per cent in February. The measure, which tracks items like manufactured food, health, education, and ICT services, reflects a steady decline in underlying price pressures.

More insights

The easing of inflation provides room for the Central Bank of Kenya to maintain or reduce its policy rates, supporting growth while keeping prices stable.

Kenya’s 4.3 per cent inflation rate in February is within the central bank’s target range of 2.5–7.5 per cent.
Food price moderation, especially in staples like sugar, mangoes, and tomatoes, contributed significantly to the lower inflation reading.
Core inflation at 2.1 per cent signals subdued underlying inflationary pressures in the economy.

By comparison, South Africa’s inflation rate eased to 3.5 per cent in January, reflecting a broader moderation trend in the region.

The latest data suggests that Kenya is experiencing manageable inflation, which may encourage further monetary easing to stimulate economic activity.

What you should know

Nigeria also recorded a slight moderation in inflation in January, according to the National Bureau of Statistics. Headline inflation eased to 15.10% in January 2026 from 15.15% in December, reflecting a marginal improvement in price stability.

The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by 50 basis points to 26.5 per cent from 27 per cent in February 2026.

Market analysts had expressed mixed expectations ahead of the MPC meeting, with opinions divided between a rate cut and a hold decision.

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