Standard Investment Bank’s (SIB) weekly fixed-income report showed liquidity conditions in Kenya remained stable, pointing to a sharp increase in interbank lending activity.
In the week ended October 19, 2026, interbank lending volumes rose 152% to KSh14.87 billion, from KSh5.90 billion in the preceding week.
The number of interbank deals increased 65%, from 17 to 28, while the Kenya Shilling Overnight Interbank Average (KESONIA) stood at an average of 8.75%.
The figures point to increased activity in short-term funding between banks, although higher trading volumes alone do not establish whether liquidity conditions have improved across the entire financial system.
What is KESONIA?
KESONIA serves as the official risk-free reference rate and a primary base lending rate for variable-rate loans denominated in Kenya Shillings. It is volume-weighted and derived from real interbank market transactions rather than policy intent alone.
Global Equivalent: It mirrors international standards like the United Kingdom’s SONIA (Sterling Overnight Index Average) and the United States’ SOFR (Secured Overnight Financing Rate)
Why it matters
Interbank market activity and overnight funding rates offer useful signals about banking-system liquidity, short-term funding costs and the transmission of monetary policy.