By Benadeta Mwaura - Reporter
Kenya, July 15, 2026 - Kenyan investors are increasingly shifting their money into short-term government securities, with the latest Central Bank of Kenya (CBK) Treasury bills auction attracting overwhelming demand for the 91-day paper as investors seek safe and liquid investment options amid easing interest rates.
The latest auction results show that the 91-day Treasury bill attracted bids worth KSh34.8 billion against an advertised offer of Sh8 billion, making it the most sought-after tenor in the auction. The demand translated into a performance rate of 434.98%, underscoring strong investor confidence in short-term government debt.
Overall, the Treasury bills auction attracted bids worth KSh49.7 billion against the government's target of KSh28 billion, representing an overall subscription rate of 177.6%. The Central Bank accepted KSh30.5 billion, raising more than its initial target while continuing to manage borrowing costs.
The strong demand comes as investors continue to favour government securities, which are considered virtually risk-free compared to equities and other investment products. Short-term Treasury bills have become particularly attractive to investors seeking predictable returns while maintaining flexibility to reinvest as interest rate conditions evolve.
The 91-day paper dominated the auction, reflecting investors' preference for shorter maturities at a time when the interest rate environment is gradually changing. By investing in shorter tenors, investors retain the option of reinvesting their funds should yields improve in future auctions.
Although the 91-day bill recorded the highest demand, investor interest remained strong across the other maturities. The 182-day and 364-day Treasury bills also attracted healthy subscriptions, demonstrating sustained appetite for government securities across the market.
The latest auction mirrors a broader trend witnessed in recent months, with Treasury bills consistently recording oversubscription as institutional investors, banks, pension funds, insurance firms and individual investors continue to increase allocations to government debt.
The strong uptake has been attributed to stable macroeconomic conditions, improved liquidity within the banking sector and the attractiveness of government securities relative to alternative investment options.
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The continued investor appetite also provides a boost for the National Treasury, which relies on Treasury bills and bonds to finance budget requirements while refinancing maturing debt. Strong subscriptions allow the government to raise funds without significantly increasing borrowing costs.
According to the Central Bank's latest market bulletin, interest rates on the 91-day and 364-day Treasury bills edged down slightly, while the 182-day paper recorded a marginal increase, suggesting that the government continues to benefit from favourable domestic borrowing conditions.
The robust performance of Treasury bills also reflects growing confidence in Kenya's domestic debt market, particularly as the government continues implementing fiscal reforms aimed at reducing reliance on expensive external borrowing.
Market analysts note that as inflation remains relatively contained and the Kenya shilling stabilises, domestic investors are expected to continue favouring Treasury bills as a secure investment that offers competitive returns with minimal risk.