Kenya, 25 June 2026 - Investors continued to channel funds into government securities this week, with the Central Bank of Kenya (CBK) receiving bids worth KSh 28 billion in the latest Treasury bills auction, underscoring sustained confidence in government debt instruments despite declining interest rates.
Data released by the Central Bank showed that investors submitted bids totaling KSh28 billion against an advertised amount of KSh 24 billion, resulting in an oversubscription rate of approximately 117%.
The strong demand highlights the continued appeal of Treasury bills among institutional investors, commercial banks, pension funds, insurance firms, and individual savers seeking secure investment options.
The auction comprised the regular 91-day, 182-day, and 364-day Treasury bills, which remain among the government's primary short-term borrowing instruments used to finance budgetary requirements and manage liquidity within the financial system.
According to CBK, the government accepted bids worth KSh 27.9 billion, reflecting the strong appetite for government paper even as yields continue to moderate following recent monetary policy easing measures.
The latest auction comes at a time when Kenya's fixed-income market is experiencing heightened activity, driven by improved macroeconomic stability, easing inflationary pressures, and expectations of lower interest rates in the months ahead.
Government securities continue to attract investors because of their relatively low risk and predictable returns compared to other investment options.
Treasury bills are particularly attractive during periods of economic uncertainty because they are backed by the government and offer guaranteed returns upon maturity.
The strong demand also reflects excess liquidity within parts of the banking sector, with some lenders opting to invest surplus funds in government securities rather than extend credit to riskier segments of the economy.
In recent months, investors have increasingly shifted toward government paper as inflation remains contained and the Kenyan shilling maintains relative stability against major international currencies.
Despite the strong demand, Treasury bill yields continued their gradual downward trend, reflecting changing market expectations following a series of policy measures by the Central Bank.
The 91-day Treasury bill recorded an average yield of approximately 8.2%, while the 182-day and 364-day papers attracted yields of around 8.5% and 10%, respectively.
The decline in returns follows the Central Bank's recent monetary policy adjustments aimed at stimulating private sector lending and supporting economic growth.