The Central Bank of Kenya's monetary policy committee cut its central bank rate by 50 basis points to 9.50%.
The bank noted that inflation remains within the government's target range as it fell to 4.5% in February from 4.8% the previous month.
Kenya's central bank said it also expects stronger growth for 2018, citing the committee's Private Sector Market Perception Survey. It added that most respondents were optimistic about the domestic economy.
The external current account deficit narrowed to 6.1% of the country's GDP in the 12 months to January from 6.4% in 2017, according to the central bank. The bank added that the deficit is expected to shrink further to 5.4% of GDP in 2018.