Kenya’s central bank raised its benchmark rate by 200 bps to 12.5%, the highest since October 2012. This first rate hike since June was driven by the need to manage exchange rate pressures and mitigate secondary effects from global price increases. The central bank aims to anchor inflationary expectations and guide inflation towards a 5% target. Kenya’s headline inflation remained relatively stable at 6.8% in November, within the upper bound of the target range since July 2023.