Kenya’s economy grew by 5.4% in Q2 2023, up from 5.2% in Q1, driven by the agricultural sector. The outlook for 2023 is positive, with IMF projecting 5.0% growth, driven by services and agriculture. Manufacturing is expected to remain sluggish but government initiatives could reverse this trend.


The Shilling depreciated 5.39% quarter-on-quarter and 19.99% year-to-date due to dollar shortage, the greenback’s strength and capital flight.


Inflation declined to 6.93% in Q3 2023, driven by lower food, gas and electricity prices. However, inflation slightly inclined at the end of the quarter due to elevated fuel and sugar prices.


Liquidity in the money markets increased in Q3 2023, as government payments more than offset tax remittances. The interbank rate declined from 16.55% to 12.44% over the quarter but reached a historical high of 17.4% in August.


PMI averaged 48.0 in Q3 2023, with a rebound in August but declined in September due to intense cost pressures and a drop in customer demand.


Despite higher dividend returns, the stock market contracted in Q3 2023 due to foreign investor outflows and losses in large-cap stocks.


Treasury Bills

Treasury bill’s subscription rate increased to 114.59% in Q3 2023, with investors preferring shorter-term paper.

Treasury Bonds

The primary bond market saw lower subscription rates and higher yields in Q3 2023, as investors demanded higher returns to compensate for a weaker Shilling and hedge against inflation.


In the international market, Kenya’s Eurobond yields rose 274 basis points in Q3 2023, as foreign investors expressed concerns about the country’s external financing constraints.

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