The government closed the year on a high note after raising Ksh 25.9 billion in its final Treasury Bills auction of 2025, surpassing the Ksh 24.0 billion it had planned to borrow and indicating a clear return of investor appetite for government paper.
The Central Bank of Kenya (CBK), which conducted the auction on December 31, stated that the offer attracted bids worth Ksh 25.9 billion, resulting in an oversubscription rate of 108 per cent. The details were released in the CBK Weekly Bulletin published on Friday, January 2, 2026.
“The Treasury bill auction of December 31 received bids totalling Ksh25.9 billion against an advertised amount of Ksh24.0 billion, representing a performance of 108.0 per cent. Interest rate on the 91-day and 182-day Treasury bills remained stable while interest rates on the 364-day Treasury bill declined marginally,” the CBK said.
The government had put up Ksh4 billion in 91-day Treasury Bills, Ksh10 billion in 182-day bills and Ksh10 billion in 364-day bills.
Strong demand was recorded across the shorter tenors, while the slight dip in the one-year rate suggested investors were comfortable locking in funds for longer, a sign of confidence in the government’s short-term fiscal outlook.
Bids were submitted electronically through the DhowCSD and Treasury Mobile Direct platforms, which have widened access to government securities, especially for retail investors.
Non-competitive bids, where investors accept the market-determined average rate, were capped at Ksh50 million per investor per tenor. Competitive bids started from Ksh 2 million, while individual non-competitive bids had a minimum entry of Ksh 50,000.
Non-competitive cap
The non-competitive cap does not apply to State corporations, public universities and semi-autonomous government agencies.
The strong performance stood in sharp contrast to the previous auction held a week earlier, on December 24, 2025. In that auction, the government offered the same Ksh 24 billion but attracted bids of only Ksh 5.41 billion, translating to a low performance rate of 22.55 per cent.
At the time, the 182-day Treasury Bills were the least attractive, drawing just Ksh 712 million against a Ksh 10 billion offer. Interest rates in that auction remained largely unchanged, with the 91-day bills accepted at 7.7281 per cent, the 182-day at 7.8 per cent and the 364-day bills at 9.2109 per cent.
The government has increasingly turned to domestic borrowing as external funding from donors and the International Monetary Fund has slowed.
Treasury Bills play a key role in meeting the government’s short-term financing needs while helping the Central Bank manage liquidity in the banking system.
The improved sentiment is also supported by a stable macroeconomic environment. Headline inflation remained at 4.5 per cent in both November and December 2025, staying within the government’s target range.
Core inflation eased further to 2 per cent, although non-core inflation climbed to 11.2 per cent due to higher food and energy prices.
The Kenyan shilling remained steady at Ksh 129.01 against the US dollar, while foreign exchange reserves stood at USD 12,394 million, enough to cover about 5.3 months of imports, reinforcing confidence in the country’s financial stability.
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