Kenya’s fixed income market is entering the March bond auction against a backdrop of strong liquidity, easing repayment pressure, and a shifting yield environment.

The Government of Kenya is reopening FXD1/2019/020 and FXD1/2021/025, targeting KES 60Bn to support the FY2025/26 budget.

While the auction comes amid continued reliance on domestic borrowing, several market dynamics are shaping investor positioning:

1. Lower immediate repayment pressure — March government obligations decline to KES 168.36Bn from KES 222.85Bn in February
2. Strong system liquidity — reflected in sharply higher Treasury bill subscription levels.
3. Monetary easing and demand for government securities — continuing to compress yields across the curve.

At the same time, the recent Eurobond issuance provides a temporary fiscal buffer, which could moderate investor aggressiveness in the near term even as domestic borrowing needs remain elevated.

Against this backdrop, Rock Advisors recommends the following bidding ranges:

1.  FXD1/2019/020: 13.00% – 13.20
2. FXD1/2021/025: 13.45% – 13.65%

The full report explores the fiscal position, liquidity conditions, yield curve dynamics, and investor behavior shaping Kenya’s bond market ahead of the auction.

Download the full report