Kenya’s government obtained KSh643 billion from the domestic debt market in the third quarter of 2026, surpassing the borrowing target it had set.
The Central Bank of Kenya (CBK) aimed to raise KSh465 billion in the quarter, an increase from KSh295 billion in the second quarter, and investors submitted bids totalling KSh965 billion, giving a subscription rate of 207 per cent; the government accepted KSh643 billion.
Standard Investment Bank (SIB) said the strong subscription reflects continued investor appetite and ample liquidity, but the growing dependence on local borrowing also signals pressure on the Treasury as inflationary pressures and rising external financing needs cloud the outlook.
SIB calculated a domestic borrowing surplus of KSh595 billion, equal to 35.3 per cent of the KSh919 billion net domestic borrowing target for the 2026/27 financial year, providing the government with headroom against its annual financing requirements.
The report noted that no disbursements from the International Monetary Fund had been received and that flexibility from project-linked loans remained limited, increasing the importance of the domestic capital market.
At the Monetary Policy Committee meeting on October 7, 2026, the committee kept the Central Bank Rate at 8.75 per cent while raising the 2026 economic growth projection to 5.0 per cent from 4.9 per cent, stating that a cautious stance was needed to anchor inflation expectations and preserve exchange-rate stability.
