CBK Raises Ksh35.74bn in Strong Treasury Bill Auction Demand

A strong appetite for government debt pushed the latest Treasury bill auction above expectations, with the government raising Ksh 35.74 billion against an offer of Ksh 24 billion, according to data released by the Central Bank of Kenya on June 18, 2026.

The auction attracted bids worth Ksh 48.98 billion, representing a subscription rate of 204.10 per cent, showing that investors continued to pile into short-term government securities despite slightly higher interest rates.

The auction covered the 91-day, 182-day and 364-day Treasury bills dated June 22, 2026. Demand, however, was heavily concentrated in the shortest maturity.

The 91-day Treasury bill dominated trading activity, pulling in Ksh 36.85 billion in bids against a modest Ksh 4 billion on offer. The government accepted Ksh 23.62 billion from this tenor alone, confirming its continued role as the most liquid and most preferred instrument in the market. Banks and money market funds typically use this paper to manage short-term cash positions, which helps explain the heavy oversubscription.

The 182-day Treasury bill saw a more cautious response, with bids totalling Ksh 3.22 billion against a Ksh 10 billion offer. The CBK accepted Ksh 3.21 billion, indicating limited competition for the mid-term paper. The 364-day bill also underperformed relative to the shorter tenor, attracting Ksh 8.92 billion in bids against a Ksh 10 billion offer, with Ksh 8.91 billion accepted.

In total, the government accepted Ksh35.74 billion, with the bulk of it—Ksh 34.45 billion—allocated toward refinancing maturing obligations. The remainder will go into fresh borrowing to support government spending needs.

Interest rates in the auction moved slightly higher compared to the previous week, reflecting tightening liquidity conditions in the domestic market. The 91-day bill rose to 8.8206 per cent from 8.7067 per cent. The 182-day paper increased to 8.7782 per cent from 8.6006 per cent, while the 364-day bill climbed to 8.9746 per cent from 8.8715 per cent.

Weighted average market rates followed the same trend, settling at 8.8880 per cent for the 91-day, 8.7806 per cent for the 182-day, and 8.9748 per cent for the 364-day instrument. Competitive bids accounted for Ksh30.17 billion of the total accepted amount, while non-competitive bids made up Ksh 5.58 billion.

The bid-to-cover ratio further highlighted the gap in demand between tenors. The 91-day paper recorded a strong 1.56 ratio, while both the 182-day and 364-day papers came in at 1.00, showing just enough demand to meet the offer.

In a brief note, the Central Bank said participation remains stable even as yields adjust to reflect market conditions. “Investor interest in Treasury bills continues to be steady, particularly in short-term maturities,” the regulator noted.

The next auction is scheduled for June 29, 2026, with bidding closing on June 25 and settlement set for June 29. Non-competitive bids remain capped at Ksh 50 million per investor per tenor, excluding state corporations, public universities, and semi-autonomous government agencies.