In the latest review, the MPC cut the base lending rate by 50 basis points to 9.5 percent down from 10 percent.
This will now see the maximum interest rate charged by banks come down to 13.5 percent from 14 percent in line with the interest rate cap law.
According to the law, banks cannot charge more than four percent of the central bank rate.
In a statement to newsrooms, CBK governor Patrick Njoroge who chairs the MPC said there was need to ease monetary policy to spark economic growth.
“Therefore, it concluded that there was scope for easing its monetary policy stance in order to support economic activity. Consequently, while noting the risk of perverse outcomes, the Committee decided to reduce the Central Bank Rate (CBR) to 9.50 percent from 10.00 percent,” Dr Njoroge said.
