Kenya Fixed Income Market Update – 21st September 2025

T-Bills Primary Auction

T-bills were undersubscribed for the first time in five weeks, signaling a slight cooling in investor demand. The overall subscription rate came in at 95.7%, down from 161.5% the previous week.

• 91-day paper: Received bids worth Kshs 4.2 bn against Kshs 4.0 bn offered, translating to a subscription rate of 106.2%, lower than the 385.2% recorded previously.
• 182-day paper: Improved to 55.8%, from 31.3% the prior week.
• 364-day paper: Declined to 131.3%, from 202.3% the previous week.

The government accepted Kshs 22.7 bn out of Kshs 23.0 bn received, translating to a high acceptance rate of 98.9%.

Yields trended downward across all papers:

• 91-day: 7.9% (↓ 2.6 bps)
• 182-day: 8.01% (↓ 1.0 bps)
• 364-day: 9.54% (↓ 1.2 bps)

Treasury Bonds

The CBK released results for the re-opened bonds FXD1/2018/020 (12.5 years, coupon 13.2%) and FXD1/2022/025 (22.2 years, coupon 14.2%).

• Overall subscription rate: 243.2%, with bids worth Kshs 97.3 bn against the Kshs 40.0 bn on offer.
• Accepted bids: Kshs 61.4 bn (acceptance rate 63.2%).
• Weighted average yields: 13.6% (FXD1/2018/020) and 14.1% (FXD1/2022/025).

Notably, yields were lower than the last reopenings (13.9% in July and 14.5% in June respectively), reflecting moderating borrowing costs. Adjusted for inflation (4.5%), the real returns stood at 9.1% and 9.6%. Factoring in tax differences, the tax-equivalent yields were 14.5% and 15.0% respectively.

Liquidity

Liquidity in the money markets eased slightly, with the average interbank rate decreasing marginally by 0.2 bps to remain at 9.5%.

• Average interbank volumes traded rose 30.7% to Kshs 7.9 bn, compared to Kshs 11.4 bn the previous week.

Kenya Eurobonds

Yields on Kenya’s Eurobonds extended their downward trajectory, with the 12-year Eurobond (2019 issue) recording the sharpest decline of 8.3 bps, to close at 7.9% from 8.0% the previous week.

Kenya Shilling

The Kenya Shilling remained stable, closing unchanged at Kshs 129.2/USD.

• Year-to-date: Appreciated 0.1% against the dollar, compared to the 17.6% appreciation recorded in 2024.
• Forex reserves: Fell by 2.8% to USD 10.9 bn (from USD 11.2 bn the previous week), equivalent to 4.8 months of import cover, comfortably above both the statutory minimum (4.0 months) and the EAC convergence requirement (4.5 months).