The Central Bank of Kenya (CBK) Treasury Bills Auction in week 23 posted a strong performance, attracting applications worth more than double the target amount.
The CBK received bids worth KES 54.6 billion against an offer of KES 24.0 billion translating to a record overall subscription rate of 227.4%, underscoring investor appetite for fixed-income instruments as the equities market trends downward amid mounting inflationary pressures.
The 91-day paper recorded robust demand, after receiving bids worth KES 32.8 billion against an offer of KES 24.0 billion, translating to a subscription rate of 820.7%, more than eight times the target amount. The strong demand of the short tenor reflects investors’ expectations of further increases in yields as inflation continues to rise.
The 364-day bill was also oversubscribed. The paper attracted bids amounting to KES 15.2 billion against an offer of KES 10.0 billion, representing a subscription rate of 152.3%. Meanwhile, investors’ appetite for the 182-day bill improved compared to the preceding auction. The paper attracted bids amounting to KES 6.5 billion against an offer of KES 10.0 billion, representing a subscription rate of 65.3%, compared to 10.5% in the previous auction.
The CBK gobbled nearly all bids received, taking up KES 54.5 billion.
CBK T-Bill Yields Continue Upward Trend
Yields across all tenors trended upward for the second consecutive week. The 182-day paper recorded the largest increase, with its yields rising by 28 bps to 8.5252%. Yields on the 91-day paper rose by 17bps to 8.5588%, while yields on the 364-day bill edged higher by 14 bps to 8.7629%.
The rise in yields reflects increasing pressure from investors on the CBK to offer higher returns amid continued inflationary pressures. As of May 2026, Kenya’s headline inflation rose to 6.7% from 5.6% in April, moving closer to the upper limit of the CBK’s target range of 7.5%, largely driven by higher fuel prices.
Ahead of the CBK’s Monetary Policy Committee (MPC) meeting scheduled for June 9, 2026, investors are anticipating for a hike in the Central Bank Rate (CBR) to contain inflation. Such a move could support a sustained rise in Treasury bill yields in the coming weeks.
Also Read: KBA Urges CBK to Raise Interest Rates Ahead of June 9 MPC Meeting
