Kenya inflation rises to 6.8% as Treasury borrowing appetite strengthens – CBK

Kenya's annual inflation rate climbed to 6.8% in September 2026, up from 6.6% in August, according to the Central Bank of Kenya (CBK). The central bank attributed the increase primarily to higher core inflation, which rose to 4.0% from 3.4% during the month. Core inflation excludes volatile food and energy prices, primarily driven by increased costs of processed food, notably milk and wheat products.

Non-core inflation, on the other hand, moderated to 14.0% from 14.7%. Foreign exchange reserves stood at USD 14.93 billion as of October 1, enabling a 6.1-month import cover. The Kenyan shilling remained relatively stable, trading at Ksh129.71 against the US dollar on October 1, compared to Ksh129.48 on September 24. Treasury bond demand heightened, with a performance rate of 170.4% in the week's auction.

Interest rates on 91-day, 182-day, and 364-day Treasury bills all decreased during the auction. The 364-day rate fell to 9.040%, down from 9.043%. The government's domestic debt rose to Ksh7.78 trillion by September 25, with Treasury bonds comprising KSh6.47 trillion of the total.