Strong investor demand for short-term government securities pushed the latest Treasury bills auction well above target, with bids exceeding the amount on offer and yields easing slightly across all maturities.

According to the Central Bank of Kenya (CBK) Weekly Bulletin, the Treasury bills auction conducted on July 23, 2026 attracted bids worth Ksh 38.5 billion against an advertised amount of Ksh28.0 billion, translating to a performance rate of 137.5 per cent.

“The Treasury bill auction of July 23, 2026, received bids totalling Ksh38.5 billion against an advertised amount of Ksh 28.0 billion, representing a performance of 137.5 per cent. Interest rates on the 91-day, 182-day and 364-day Treasury bills decreased marginally,” read the bulletin in part.

Short-term paper attracts strong demand

The strongest demand was recorded in the 91-day Treasury bill, which received bids worth Ksh22.06 billion against an offer of Ksh8 billion. The 182-day bill attracted Ksh11.56 billion in bids compared with an advertised Ksh10 billion, while the 364-day paper received Ksh4.88 billion against a target of Ksh10 billion.

Average interest rates declined marginally across all three tenors. The 91-day bill settled at 8.782 per cent, the 182-day at 8.955 per cent and the 364-day at 9.036 per cent.

The auction results indicate continued demand for government securities despite the slight decline in yields, with investors maintaining interest in shorter-term instruments.

Liquidity supports uptake

The strong subscription came during a week of stable liquidity in the banking sector. CBK reported that excess reserves in the banking system averaged Ksh14.7 billion above the cash reserve requirement, leaving financial institutions with sufficient funds for investment.

The Kenya Shilling Overnight Interbank Average Rate remained unchanged at 8.75 per cent during the review period, reflecting stable money market conditions.

The successful auction also supports the government’s domestic borrowing programme by providing funding for budgetary requirements while helping moderate borrowing costs as yields softened.

Long-term bonds also oversubscribed

Demand extended beyond Treasury bills to longer-term government securities.

CBK reported that the re-opened 20-year and 25-year Treasury bonds auctioned on July 22, 2026 received bids totalling Ksh85.9 billion against an advertised amount of Ksh40.0 billion, representing a performance rate of 214.8 per cent.

The strong uptake of both Treasury bills and Treasury bonds highlights sustained investor participation in Kenya’s domestic debt market.

The latest auction results come as the government continues to tap the domestic market for financing, with investors maintaining interest in government securities across both short-term and long-term maturities despite the slight moderation in yields.