Treasury Bills in 2025 remained oversubscribed albeit lower than the previous year. The Central Bank of Kenya (CBK) received bids amounting to KES 1.69 trillion against a targeted amount of KES 1.25 trillion, representing an overall subscription of 135.6% (an oversubscription of 35.6%), a decline from 153.3% recorded in 2024.
The 91-day paper received bids worth KES 423.5 billion against the offered KES 208.0 billion, translating to an oversubscription rate of 103.6%, lower than the oversubscription rate of 299.7% recorded in 2024. The 182-day paper recorded an oversubscription rate of 69.1%, down from that of 104.9% in 2024, while the 364-day paper recorded an overall subscription rate of 175.0%, up from 103.0% in 2024.
Yields of the treasury bills were on a downward trajectory during the period, primarily drive by the decline in the Central Bank Rate (CBR). During the review period, the Monetary Policy Committee (MPC) of the CBK cut the policy rate by 225 bps to 9.00% in December from 11.25% at the start of the year.
The average yield of the 91-day paper fell by 6.9% to 8.3%, from 15.2% in 2024, while the yield of the 182-day paper dropped by 7.2% to 8.6% from 15.7% in 2024. The 364-day paper’s yield decreased by 6.1% to 10.0% from 16.0% in 2024.
Treasury Bills Year-on-Year Yields Trajectory
On year-on-year basis, treasury bills recorded a four year low in yields, mainly driven by the Kenya shilling stability, eased inflation and improved liquidity. The Kenya shilling has remained stable for the most of the year, oscillating between KES 128 – KES 132 to the US Dollar. Inflation has remained within the CBK’s target of 2.5% – 7.5% throughout the year, but has risen from 3.3% in January 2025 to 4.5% in December 2025, an increase of 120 basis points (bps).
The 182-day yield declined the most by 222 bps closing the year at 7.8%, the 91-day yield fell by 217 bps to 7.7%, while the 364-day yield dropped by 220 bps to 9.2%.
The lower yields offered the government a more favourable domestic borrowing environment as it seeks to reduce borrowing costs. The government accepted KES 1.50 trillion out of the KES 1.69 trillion of bids received, translating to an acceptance rate of 88.7%, up from 77.3% recorded in 2024.
91-day paper
Despite declines in returns, investors showed strong appetite for the 91-day paper, highlighting a deliberate strategy to maintain liquidity and flexibility, allowing them to reassess positions frequently rather than lock in lower yields for extended periods.
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