Kenya’s central bank increased its benchmark rate by 100 bps to 10.5% to ease inflationary pressures. This adjustment brings borrowing costs to their highest point since August 2016. Policymakers noted the increased risks to the inflation outlook and external threats that could impact the economy. The annual inflation rate in Kenya unexpectedly rose to 8% in May 2023, up from a ten-month low of 7.9% in April, exceeding the central bank’s preferred target range of 2.5%-7.5%.