Increased investor participation in treasury bills has reduced the average time to maturity of the overall domestic debt, with both Treasury bonds and bills having a maturity of 7.4 years as of June 2025, compared to 7.5 years in 2024.
The increase in the treasury bill stock has primarily been driven by increased investor appetite for the 364-day paper, mainly due to its higher yields compared to the 182- and 91-day papers. Consequently, the ratio of treasury bills to treasury bonds increased from 12:88 in December 2024 to 17:83 in June 2025. Additionally, Investors’ urge to lock in returns in a decreasing interest rate environment sparked the surge in treasury bill stock. In August, the Central Bank of Kenya (CBK) cut its interest rate by 25 basis points to 9.5%.
According to the apex bank, the readjustment in the interest rate increases the propensity of investors to invest in shorter-dated bonds. The issuance of shorter-dated instruments reduced the average time to maturity, suggesting mounting pressure on the government from upcoming redemptions.
Treasury Bills and Bonds
As of September 12, 2025, treasury bills amounted to KES 1.07 trillion, translating to 16.6% of the total securities and 16.2% of the total gross domestic debt. Treasury bonds totaled KES 5.37 trillion, equivalent to 83.4% of the total securities and 81.4% of the total gross domestic debt. Currently, the total domestic debt stands at KES 6.6 trillion, up 11.9% from 5.9 trillion in December 2024.
Also Read: Investor Appetite Soars for 364-Day T-bill on Higher Yields
