Kenya’s inflation fell to 6.4 per cent in June 2026 from 6.7 per cent in May, according to the latest Central Bank of Kenya (CBK) Weekly Bulletin, reflecting easing global oil prices and lower domestic food costs.
Core inflation declined slightly to 3.1 per cent from 3.2 per cent, while non-core inflation dropped to 15.1 per cent from 16.0 per cent, supported by lower energy, transport and food prices.
Shilling Holds Firm
The Kenya shilling remained stable against major international and regional currencies during the week ending July 2, trading at KSh129.30 against the US dollar, compared with KSh129.63 a week earlier.
CBK said the country’s foreign exchange reserves stood at USD14.05 billion, equivalent to six months of import cover, comfortably above the statutory minimum requirement of four months.
Money Market Remains Liquid
The money market remained liquid during the review period, supported by active open market operations.
Commercial banks held excess reserves averaging KSh32.8 billion above the 3.25 per cent Cash Reserve Ratio requirement. The Kenya Shilling Overnight Interbank Average Rate (KESONIA) remained unchanged at 8.75 per cent.
However, interbank market activity slowed, with the average number of transactions falling to 19 from 28 the previous week, while the value traded declined to KSh8.8 billion from KSh16.1 billion.
Treasury Bills Attract Strong Demand
Investor appetite for government securities remained strong, with the July 2 Treasury bill auction receiving bids worth KSh35.2 billion against an advertised amount of KSh24 billion, translating to a 146.6 per cent subscription rate.
Interest rates on the 91-day, 182-day and 364-day Treasury bills increased marginally.
Stock Market Posts Strong Gains
The Nairobi Securities Exchange recorded broad-based gains during the week ending July 3.
The NASI, NSE 25 and NSE 20 share indices rose by 3.08 per cent, 3.38 per cent and 2.69 per cent, respectively. Market capitalisation, total shares traded, and equity turnover also increased significantly over the period.
Bond Turnover Declines
Activity in the domestic bond market weakened, with secondary market turnover falling by 22.66 per cent during the week ending July 2.
In the international market, yields on Kenya’s Eurobonds rose by an average of 20.89 basis points. Eurobond yields also increased in Côte d’Ivoire, while Angola recorded lower yields.
Global Markets Mixed
Globally, inflation in the Euro Area eased to 2.8 per cent in June from 3.2 per cent in May, while core inflation declined to 2.4 per cent.
In the United States, labour market conditions moderated despite the unemployment rate improving to 4.2 per cent from 4.3 per cent. The US Dollar Index weakened by 0.5 per cent during the week, reflecting softer demand for the dollar.
Commodity markets posted mixed performance. Murban crude oil prices declined to USD67.99 per barrel from USD69.00, while spot gold prices climbed to USD4,122.80 per ounce as investors continued to seek safe-haven assets despite easing geopolitical tensions.
