CBK Weekly Report: Kenya's Economy Grows 5. 3% In First Quarter as Demand for Government Securities Surges
Kenya's economy recorded stronger growth in the first quarter of 2026, while demand for government securities remained robust, according to the Central Bank of Kenya's (CBK) Weekly Bulletin released on July. . .
Kenya's economy recorded stronger growth in the first quarter of 2026, while demand for government securities remained robust, according to the Central Bank of Kenya's (CBK) Weekly Bulletin released on July 10. CBK reported that real Gross Domestic Product (GDP) grew by 5. 3% in the first quarter of 2026, up from 4. 9% in the corresponding quarter of 2025. The improvement was supported by stronger performance in the industry and services sectors, although agricultural growth slowed. The industry sector expanded by 5. 4%, driven by improvements in manufacturing, construction, mining and quarrying. The services sector grew by 5. 5%, supported by accommodation and food services, finance and insurance, real estate, and education. Agriculture grew by 4. 9%, compared with 5. 3% a year earlier. The Kenyan shilling remained stable against major international and regional currencies during the week ending July 9. The currency traded at Ksh129. 22 against the US dollar on July 9, compared with Ksh129. 30 on July 2. Foreign exchange reserves rose to USD 14,127 million, equivalent to 6. 0 months of import cover, remaining above CBK's statutory requirement of at least four months of import cover. In the money market, liquidity remained adequate. Commercial banks' excess reserves averaged Ksh30. 4 billion above the required Cash Reserve Ratio, while the Kenya Shilling Overnight Interbank Average (KESONIA) rate remained unchanged at 8. 75% during the week. Investor appetite for government securities remained strong. The Treasury bill auction held on July 9 attracted bids worth Ksh49. 7 billion against an advertised amount of Ksh28. 0 billion, representing a subscription rate of 177. 6%. Interest rates on the 91-day and 364-day Treasury bills declined, while the 182-day Treasury bill rate increased slightly. Demand was also strong in the Treasury bond market. The reopened 10-year, 20-year and 30-year Treasury bond auction conducted on July 8 received bids worth Ksh144. 5 billion, more than double the advertised Ksh70. 0 billion, translating to a subscription rate of 206. 4%. On the Nairobi Securities Exchange, the NSE All Share Index (NASI) and NSE 20 Share Index increased by 0. 78% and 0. 09%, respectively, during the week ending July 9, while the NSE 25 Share Index declined by 0. 20%. Market capitalisation rose by 0. 78%, although total shares traded and equity turnover dropped sharply by 98. 26% and 98. 20%, respectively. In the bond market, secondary market bond turnover fell by 43. 46% during the week. Internationally, yields on Kenya's Eurobonds increased by an average of 10. 05 basis points, while the International Monetary Fund projected global economic growth of 3. 0% in 2026, down from 3. 5% in 2025. CBK also noted that Murban crude oil prices increased to USD72. 27 per barrel during the week, reflecting heightened tensions in the Middle East, while spot gold prices edged lower to USD4,121. 02 per ounce.