Kenya Fixed Income Market Update – 16 November 2025

T-Bills Primary Auction

T-bills were oversubscribed for the sixth consecutive week, with the overall subscription rate coming in at 127.3%, slightly below the 166.1% recorded the previous week.
Investor sentiment moderated on the short end:

• 91-day paper: 163.5% subscribed (Kshs 6.5bn bids vs Kshs 4.0bn offered) – yield marginally down 0.5 bps to 7.80%.
• 182-day paper: Subscription 36.9%, yield unchanged at 7.80%.
• 364-day paper: Subscription 203.1%, yield rose 1.2 bps to 9.40%.

The Central Bank of Kenya (CBK) accepted Kshs 30.4bn out of Kshs 30.5bn bids, maintaining a 99.7% acceptance rate.
The flattening yield curve on the short-term segment highlights investor confidence in near-term rate stability, following the recent CBR reduction to 9.25% and contained inflation levels.

Primary Bond Market

The CBK is seeking to raise Kshs 40.0bn through the reopened bonds FXD3/2019/015 and FXD1/2022/025, carrying fixed coupon rates of 12.3% and 14.2%, and tenors to maturity of 8.7 years and 21.9 years, respectively.
The offer period opened on 11th November and will close on 19th November 2025.

🔹 Recommended Bidding Ranges:

• FXD3/2019/015: 12.00% – 13.00%
• FXD1/2022/025: 13.50% – 14.50%

We expect balanced investor participation, favoring the mid-tenor segment for stable carry while maintaining selective exposure to longer maturities for duration positioning.

Liquidity Conditions

Liquidity in the money markets eased, with the average interbank rate declining slightly by 1.5 bps to 9.2%.
Meanwhile, average interbank volumes rose sharply by 102.3% to Kshs 13.9bn, supported by government payments that offset tax remittances.

Eurobond Performance

Kenya’s Eurobond yields were on a downward trajectory, with the 12-year 2019 issue declining the most by 11.4 bps to 8.1%. The softening yields signal renewed investor confidence, supported by improved reserve buffers and stable global sentiment toward frontier markets.

Kenya Shilling & Forex Reserves

The Kenya Shilling slightly weakened against the US Dollar by 3.6 bps, closing at Kshs 129.3, compared to Kshs 129.2 the previous week.
On a year-to-date basis, the Shilling has appreciated by 1.5 bps, maintaining relative stability amid moderate demand.

Forex reserves rose 1.1% to USD 12.3bn, equivalent to 5.4 months of import cover, well above the statutory 4.0-month requirement — providing continued support to the local currency.

Weekly Highlights: EPRA Fuel Price Review

The Energy and Petroleum Regulatory Authority (EPRA) retained fuel prices for the period 15th November – 14th December 2025:

• Super Petrol – Kshs 184.5/litre
• Diesel – Kshs 171.5/litre
• Kerosene – Kshs 154.8/litre

The average landing cost for Super Petrol decreased slightly by 0.2% to USD 619.1/m³, while Diesel and Kerosene costs rose by 1.8% and 0.7%, respectively.
Fuel stability and a steady exchange rate continue to anchor inflation expectations, sustaining Kenya’s macroeconomic stability.

Market Outlook

Kenya’s fixed income market remains resilient, supported by:

• Anchored inflation and stable yields,
• Adequate forex reserves,
• Improved liquidity, and
• Sustained investor demand across short-term instruments.

Looking ahead, auction results for the November reopens will provide a key test of duration appetite, while global yields and inflation expectations will shape yield-curve dynamics heading into year-end.

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