Market Highlights

The Read

CBR held at 8.75%: MPC paused after 10 consecutive cuts totalling 425bps since August 2024.

Inflation uptick: CPI rose to 5.60% in April from 4.40% in March, driven by food and energy.

CMA licensing reform: New variable fees replacing flat KES 150K charge; RBCA reporting now mandatory.

Key Metrics

CBR: 8.75% — Held | 425bps cut since Aug '24

CPI (Apr 2026): 5.60% — Up from 4.40% in March

GDP Growth (2026): 5.3% — CBK projection

GDP Growth (2026): 4.5% — IMF WEO Apr 2026

CIS Accounts: 3.0M — +127.7% YoY

CBK Policy Rate vs. Inflation — 12 Months

Source: CBK MPC decisions; KNBS CPI data.

Monetary Policy Context

The Monetary Policy Committee retained the Central Bank Rate at 8.75% at its April 8, 2026 meeting, pausing after ten consecutive rate cuts since August 2024. The cumulative 425 basis points of easing reflected confidence in the disinflation trend. However, the April CPI uptick to 5.60% — driven by food prices (7.7% vs 7.3%) and housing costs — has introduced caution. The MPC cited rising global risks from the Middle East conflict, particularly the impact on oil and fertiliser prices, as the rationale for holding.

The CBK projects 5.3% GDP growth for 2026, supported by a dynamic services sector (including finance and technology) and robust agriculture. Analysts expect the next MPC decision to hinge heavily on whether May CPI confirms or reverses the April uptick.

Regulatory Updates

CMA licensing reform: The Capital Markets Authority is implementing new variable licensing fees for fund managers — replacing the flat KES 150,000 annual fee with a 0.05% of AUM charge (floor KES 100,000, cap KES 15 million). This benefits smaller managers and raises costs for the largest players.

RBCA reporting: The new Risk-Based Capital Adequacy online reporting platform went live in January 2026. All licensed intermediaries are now required to submit returns through it.

New entrant: Mema Asset Management received its fund manager licence in February 2026, expanding the CMA-licensed fund manager universe.

Investor protection: Only CMA-licensed products appear in Serrari rankings. Collective Investment Scheme AUM reached KES 679.6 billion with 3.0 million investor accounts. Always verify a provider's licence at licensees.cma.or.ke before investing.

The Week Ahead

May CPI: KNBS expected to release May CPI data — market watching for a second consecutive inflation uptick.

CMA register: Quarterly licensee register review due end of month.

Next MPC: Watch for communication from the CBK on the June MPC meeting date.

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