The government recorded strong demand for its debt instruments this week after both Treasury bill and Treasury bond auctions exceeded their targets, reflecting sustained investor interest in Kenya’s securities.

According to the Central Bank of Kenya (CBK) Weekly Bulletin released on June 26, 2026, Treasury bill and bond sales attracted bids above the advertised amounts as investors continued to respond to the government’s borrowing programme.

Treasury auctions exceed targets

The Treasury bill auction held on June 25, 2026, received bids worth Ksh28.1 billion against an advertised amount of Ksh24.0 billion, translating to a performance rate of 116.9 per cent. Interest rates on the 91-day, 182-day and 364-day Treasury bills increased marginally.

“The Treasury bill auction of June 25 received bids totalling Ksh28.1 billion against an advertised amount of Ksh24.0 billion, representing a performance of 116.9 per cent. Interest rates on the 91-day, 182-day and 364-day Treasury bills increased marginally,” the bulletin read in part.

A Treasury bond tap sale conducted on June 23 also attracted strong demand. The 20-year and 25-year bonds received bids worth Ksh31.0 billion against Ksh20.0 billion on offer, representing an oversubscription of 155.1 per cent.

The results reflected continued investor participation in long-term government securities as the National Treasury sought to raise funds through domestic borrowing.

CBK launches bond switch auction

On June 26, 2026, the Central Bank of Kenya launched a Ksh10 billion voluntary Treasury bond switch auction as part of the government’s debt management programme.

The exercise allows holders of the Treasury bond FXD1/2021/005, which matures on November 9, 2026, with an 11.277 per cent coupon, to exchange their holdings for the FXD1/2012/020 bond maturing on November 1, 2032, carrying a 12 per cent coupon.

The auction opened on June 26, 2026, and will close on July 13, 2026, with settlement scheduled for July 15, 2026. It will be conducted using a multi-price format based on yields.

According to CBK, the source bond has a quoted yield of 8.8322 per cent and a dirty price of 102.7442. The destination bond has about 6.3 years remaining to maturity, attracts a 10 per cent withholding tax compared to 15 per cent on the source bond, and qualifies for statutory liquidity ratio requirements.

Participation is limited to investors holding unencumbered units of the source bond. Non-competitive bids range from Ksh50,000 to Ksh50 million, while competitive bids begin at Ksh2 million per Central Depository System account.

Market indicators remain positive

The broader financial market also recorded gains during the week ending June 25, 2026. The NASI, NSE 25, and NSE 20 share indices rose by 2.24 per cent, 2.42 per cent and 2.81 per cent, respectively.

Market capitalisation increased by 3.46 per cent, while the volume of shares traded rose by 18.33 per cent. Equity turnover climbed by 39.80 per cent, and secondary market bond turnover increased by 36.38 per cent.

Internationally, oil prices declined following easing geopolitical tensions after the US-Iran ceasefire and the reopening of the Strait of Hormuz, while gold prices also fell as demand for safe-haven assets eased.