Fixed Income & Banking

The Read

T-bill yields steady: 91-day at 8.39%, 182-day at 8.21%, 364-day at 8.59% — CBK auction well-bid as rates plateau after 10 consecutive CBR cuts.

10-Year bond stable: Yield held at 11.52%. May bond re-opening targeting KES 80 billion drew healthy subscription.

Deposit rates lag: NCBA leads at 8.64% but most banks offer well below T-bill yields, narrowing the case for bank deposits.

Key Metrics

91-Day T-Bill: 8.39% — Issue 2683 | Next auction 28 May

182-Day T-Bill: 8.21% — Issue 2657 | Next auction 28 May

364-Day T-Bill: 8.59% — Issue 2612 | Next auction 28 May

10Y Bond Yield: 11.52% — Steady

Kenya Government Yield Curve

Source: Central Bank of Kenya auction results, CBK weekly bulletin. Data as at 23 May 2026.

Treasury Bond Issues — Active Re-openings

Bank Fixed Deposit Rate Comparison

Source: Published bank rate sheets, verified Mar 2026. Subject to 15% WHT. KDIC insured up to KES 500,000.

Analysis: What Moved & Why

The CBK Friday auction saw strong demand across all three T-bill tenors, with aggregate bids exceeding offer amounts. The 91-day came in at 8.39% (issue 2683/091), the 182-day at 8.21% (issue 2657/182) and the 364-day at 8.59% (issue 2612/364) as liquidity remained comfortable following the MPC's decision to hold the CBR at 8.75%. The next auction is scheduled for 28 May 2026. The 10-year benchmark held steady at 11.52%.

The May bond re-opening targeting KES 80 billion drew healthy subscription, with the 20-year tranche (13.924% coupon) attracting particular interest from pension funds seeking duration. On the deposit side, NCBA continues to lead with 8.64% on fixed deposits, though the gap with T-bill yields narrows the incentive for bank deposits versus government paper.

What It Means For You

Savers: With T-bill yields stabilising around 8.2–8.6% and the CBR on hold, government paper remains an attractive low-risk option. The 364-day T-bill at 8.59% offers a meaningful real return above April's 5.6% inflation. Consider Treasury Mobile Direct for direct access to primary auctions.

Fixed deposit holders: Most banks continue to offer below-market rates. Only NCBA and I&M are competitive with T-bills. If your bank offers less than 6%, compare against MMFs and T-bills.

The Week Ahead

Friday 30 May: CBK T-bill auction — watch for any further yield compression.

Bond calendar: Next primary bond issuance expected in June; watch for the prospectus announcement.

Global link: Fed June FOMC decision will influence global rate expectations and KES yield differentials.

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