The Treasury Bond switch auction dated January 21, 2026, successfully migrated debt from the shorter-term source security (FXD1/2016/010) into a longer-term destination bond (FXD1/2022/015), which has a remaining tenor of 11.3 years and has a due date of April 6, 2037.
By doing this, the Central Bank of Kenya (CBK) is effectively managing the maturity profile of the national debt while benefiting from high investor demand. The auction reflected strong investor appetite, achieving a performance rate of 132.46% with total bids received reaching KES 26.491 billion against an initial offer of KES 20 billion.
Source: CBK
CBK Cuts to Base Rate Drive Treasury Bond Yields Lower
The Central Bank of Kenya accepted a total of KES 25.173 billion, of which the vast majority – KES 21.705 billion, stemmed from competitive bids, resulting in a bid-to-cover ratio of 1.05. Although the bond carries a coupon rate of 13.9420%, the weighted average rate of accepted bids settled at 13.1669%, which led to the security to be priced at a premium of 107.9900 per KES 100. This transaction serves as a critical tool for the government to effectively manage the maturity profile of the national debt by making use of high market demand to extend its obligations.
Yields on government securities have generally trended downward, influenced by a sustained monetary easing cycle. In previous meetings, the Monetary Policy Committee (MPC) implemented consecutive base rate cuts, bringing the rate down to 9.00% as of December 2025. Consequently, the yield curve has also maintained a downward shift supported by 225 bps worth of cuts to the base rate.
Also Read: CBK Treasury Bills Maintain Strong Momentum in First 2026 Auction
