In April 2024 Kenya's 364-day Treasury bill paid 16.99% a year. At today's auction it paid 9.04%.
On KES 500,000 that is the difference between keeping KES 72,009 a year after tax and keeping KES 38,308. The saver's income from the same bill has nearly halved.
The Afronomics verdict: the fall from 17% to 9% is the price of lower inflation and cheaper loans, and the savers who treated 2024's rates as normal are the ones paying it.
What happened
FactsThe 364-day bill dated 1 April 2024 cleared at a weighted average rate of 16.9899%, the highest in our auction file since 2023. The 91-day bill peaked a week earlier, at 16.7306% on 25 March 2024. Both figures are in the CBK's published results.
FactsAt the auction held today, for bills dated 19 October 2026, the 364-day bill cleared at 9.0383% and the 91-day bill at 8.75%, the CBK's results show. The one-year rate has fallen by 7.95 points and the three-month rate by 7.98 points.
FactsIt has not been a straight line down. The 364-day bill reached its low of 8.27% on 13 April 2026 and has since risen to just above 9%.
FactsThe CBK raised the Central Bank Rate to 13.00% on 6 February 2024. On 6 August 2024 it cut to 12.75%, citing room for "a gradual easing of the monetary policy stance". By 10 February 2026 it had cut to 8.75%, where the Monetary Policy Committee left it on 7 October 2026.
What the numbers show
AnalysisA Treasury bill is sold at a discount and repaid at face value. The interest is the gap, and 15% of it goes in withholding tax, which the CBK collects upfront with the price, its own guide to Government securities shows. Here is what KES 500,000 at the auction price buys and keeps:
| One 364-day bill, KES 500,000 at the auction price | 1 April 2024 | 19 October 2026 |
|---|---|---|
| Rate | 16.9899% | 9.0383% |
| Price per KES 100 | 85.5115 | 91.7317 |
| Repaid at maturity | KES 584,717 | KES 545,068 |
| Interest | KES 84,717 | KES 45,068 |
| Tax at 15%, paid upfront | KES 12,708 | KES 6,760 |
| Total paid at the auction | KES 512,708 | KES 506,760 |
| Kept | KES 72,009 | KES 38,308 |
Source: CBK auction results (Afronomics auction file). Arithmetic: 500,000 × 100 ÷ price = face value; face value − 500,000 = interest; tax = 15% of interest.
AnalysisThe gap is KES 33,702 a year, 47% less. A saver living on that interest has lost about KES 2,800 a month.
AnalysisThe 91-day bill shows the same fall in a shorter window. KES 500,000 in one 91-day bill kept KES 17,728 after tax in March 2024 and keeps KES 9,271 today.
Why it fell
FactsThe CBK's August 2024 statement said the Supplementary Budget was "expected to lower the fiscal deficit from 5.6 percent of GDP in FY2023/24 to 4.3 percent of GDP in FY2024/25". In October 2026 the Committee "noted the ongoing implementation of the FY2026/27 Government Budget, and the planned fiscal consolidation strategy".
AnalysisTwo things pushed rates down. The CBK cut its own rate by 4.25 points, and other shilling rates followed: the MPC says average bank lending rates fell from 17.2% in November 2024 to 14.4% in September 2026. And the Treasury planned to borrow less, so it did not need to take every bid. In 2024 investors bid KES 1.95 trillion for bills and the Treasury took KES 1.51 trillion. So far in 2026 (bills dated up to 19 October) they have bid KES 1.75 trillion and it has taken KES 1.40 trillion.
AnalysisDemand has also moved to the short end. Today the 91-day bill drew bids of KES 49.8 billion for KES 8 billion on offer. The 364-day bill drew KES 6.6 billion for KES 10 billion. The 91-day rate now sits exactly at the Central Bank Rate, 8.75%.
Where the money went
FactsMoney market funds held KES 171.2 billion on 30 June 2024, 67% of all unit trust assets, according to the Capital Markets Authority. On 30 June 2026 they held KES 459.9 billion, out of KES 948.7 billion in all unit trusts. Both money market fund figures come from one series, the CMA's Table 16 in its June 2026 report.
AnalysisMoney market fund assets grew about 2.7 times in two years, while the bill rate halved. What a saver keeps from KES 500,000 for a year now, after 15% tax:
| Where | Rate | Kept |
|---|---|---|
| Infrastructure bond IFB1/2019/016, reopened 17 Aug 2026 (tax-free) | 12.196% | KES 60,980 |
| Money market fund, middle of the five we read on 15 Oct 2026 | 10.35% | KES 43,988 |
| 364-day bill, 19 Oct 2026 | 9.0383% | KES 38,308 |
| Bank deposits, CBK average, Aug 2026 | 6.91% | KES 29,368 |
Sources: CBK auction results; Afronomics money market fund file (yields as fund managers publish them; most are quoted before fees); CBK weighted average commercial bank rates. Not like for like: a fund's yield changes daily and is not guaranteed; a bill's is fixed at purchase, and its tax is paid upfront on top of the KES 500,000; the infrastructure bond locks money up for years.
AnalysisThe fund yield is the manager's own published figure, and it moves every day. The bill's 9.04% is locked in for a year. A saver comparing them is comparing a promise with a forecast. You can run your own numbers on the Treasury bill calculator.
Our verdict
OpinionThe fall from 17% to 9% is the price of lower inflation and cheaper loans, and the savers who treated 2024's rates as normal are the ones paying it.
The 2024 rates were not a reward. They were an emergency price, paid while the CBK was trying, in its own words, to "anchor inflationary expectations and contain exchange rate pressures". When the emergency eased, the price fell. That is the system working.
But the system does not send a letter. Someone who planned school fees or rent around KES 72,000 a year from half a million shillings now has KES 38,000. The money market funds have absorbed much of the move, and their yields will follow the bill rate down if the CBK keeps cutting.
What would change our mind
A sustained rise in the 364-day rate back above 12%, without a jump in inflation or a weaker shilling. That would mean the 2024 rates reflected something lasting about Kenya's borrowing, not a passing crisis.
Information, not advice.