The Central Bank of Kenya (CBK) has increased its weekly Treasury bill borrowing target from Ksh.24 billion to Ksh.28 billion, signaling the government’s growing need to finance its budget through the domestic market.
The higher target comes as Kenya’s net domestic borrowing requirement for the 2026/27 financial year rises to Ksh.1.03 trillion, up from Ksh.994.8 billion in the previous fiscal year.
The adjustment is expected to increase the amount the government can raise through short-term Treasury bills by approximately Ksh.208 billion annually.
According to market analysts, the move reflects the government’s increased reliance on local borrowing to fund its expenditure plans.
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Churchill Ogutu, Head of Research at Capital A Investment Bank, said the revised target is largely in line with the higher domestic borrowing requirement for the current financial year.
The decision is understood to have been made jointly by the CBK and the National Treasury’s Public Debt Management Office, which oversees the country’s borrowing strategy.
Treasury bills remain one of the government’s preferred short-term borrowing instruments, attracting strong interest from banks, fund managers and individual investors seeking relatively low-risk investment opportunities. Recent auctions have continued to receive robust demand despite changing interest rate expectations.
The increase in the weekly auction target highlights the government’s continued dependence on the domestic debt market to bridge its financing gap while balancing rising expenditure needs and debt obligations.
Investors will now be watching closely to see whether the larger supply of Treasury bills influences demand and yields in the coming months.
