Two years ago, on 7 October 2024, Kenya’s government paid 16.73% to borrow for a year. On 5 October 2026 it paid 9.04%. Both figures are the weighted average rate at the Central Bank of Kenya’s 364-day Treasury bill auction, as printed in its result notices.
For a saver that is the difference between KES 14,220 and KES 7,684 a year on KES 100,000, after the 15% withholding tax. The fall in rates has cost that saver KES 6,536 a year.
Banks passed on the cut unevenly
The Central Bank’s monthly averages across all commercial banks show where the cut landed (August 2024 against August 2026, the latest month published):
| Aug 2024 | Aug 2026 | Change | |
|---|---|---|---|
| Deposit rate | 11.14% | 6.91% | −4.23 points |
| Savings rate | 4.62% | 3.54% | −1.08 points |
| Lending rate | 16.84% | 14.34% | −2.50 points |
| Lending minus deposit | 5.70 | 7.43 | +1.73 points |
What banks pay on deposits fell by 4.23 points. What they charge on loans fell by 2.50. The gap between the two, which is what a bank keeps before costs and bad loans, widened by 1.73 points. It peaked at 7.96 points in February 2026 and has narrowed a little each month since, so watch whether that continues.
What it means
For a saver (Analysis): money left in a savings account earns 3.54% before tax, against 9.04% on the one-year bill and 8.77% on the 91-day bill. The bill is the floor to judge any savings offer against. Our fair-rate check does that comparison in shillings.
For a borrower (Analysis): the average loan has become cheaper by 2.5 points, much less than the 7.7-point fall in the government’s own borrowing cost. A borrower negotiating a new loan or a refinancing has the bill rate and the industry average on their side.
For a treasury (Analysis): the widening spread is industry-wide. Single banks differ, and the averages hide them.
Every figure here comes from the Central Bank’s own publications, linked below. The full series are free: Kenya T-bill auctions since 2011 and bank rates compared.
Information, not advice.