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KESONIA Interest Rate Benchmark

Overview

The CBK has embarked on a strategic initiative to modernize Kenya’s benchmark interest rate framework. This reform is driven by the need to enhance transparency, reliability, and market confidence in domestic financial markets and strengthen monetary policy transmission, while aligning with international best practices and standards.

The overnight interbank rate has been identified as the ideal foundation for developing Kenya’s Risk-Free Rate (RFR) officially named Kenya Shilling Overnight Interbank Average (KESONIA). KESONIA stands for the Kenya Shilling Overnight Interbank Average. It is a transaction-based benchmark rate reflecting the average interest rate at which banks in Kenya lend and borrow unsecured overnight funds in Kenyan Shillings.

The Central Bank of Kenya (CBK) is the administrator for KESONIA. CBK takes responsibility for its governance and publication every business day.

To support the Risk-Free Rate transition, CBK began publishing KESONIA and KESONIA Compounded Index from September 1, 2025.

How KESONIA is derived

Gathering data

CBK obtains data on banks interbank overnight transactions at the end of every business day.

Checking accuracy of data

CBK validates the data for credibility and accuracy to ensure consistency with interbank overnight trading activity for the day.

Daily calculation

CBK calculates KESONIA and KESONIA compounded index.

Publishing of data

CBK will publish KESONIA and KESONIA compounded index by 9.00am at the start of business for rates applicable the previous business day. On weekends and bank holidays, the KESONIA rate is held constant from the last working day.

View the latest data on KESONIA and KESONIA Compounded Index.

KESONIA -Frequently Asked Questions (FAQ)

What is KESONIA?
  • KESONIA stands for the Kenya Shilling Overnight Interbank Average. It is a transaction-based benchmark rate reflecting the average interest rate at which banks in Kenya lend and borrow unsecured overnight funds in Kenya Shillings.
Is KESONIA a new rate?
  • No. KESONIA is a formal renaming of the existing overnight interbank average rate. The methodology remains unchanged and continues to reflect actual overnight interbank lending transactions.
Why was the name changed?
  • The name change aligns with international benchmark reform practices and provides a clearer identity for Kenya’s risk-free reference rate, consistent with global standards such as Sterling Overnight Index Average (SONIA) of UK and the Secured Overnight Financing Rate (SOFR) of US.
Does KESONIA affect how overnight weighted average rate is calculated?
  • No. There are no methodological changes. The rate continues to be calculated as a volume-weighted average of overnight interbank transactions.
What is KESONIA compounded in arrears?
  • KESONIA compounded in arrears, refers to calculating interest by compounding the daily overnight rate in each day over an interest period.
Will KESONIA be the only rate in use?
  • KESONIA will be applicable to all variable rate loans except for foreign currency denominated loans and fixed rate loans. Where KESONIA is not practical, the customers may be availed of the use of Central Bank Rate (CBR) as the alternative reference rate.
What if KESONIA data is unavailable?
  • Fallback to CBR is allowed for that period. Contracts should provide for this contingency.
Is KESONIA a risk-free rate?
  • Yes. It reflects overnight unsecured lending among banks, with minimal term or credit risk.
Will contracts or systems need to be updated?
  • Yes. Commercial Banks will update internal documentation, system references, pricing models, and legal agreements to reflect the KESONIA naming convention going forward.
What are the broader implications of adopting KESONIA?
  • Adopting KESONIA supports a broader shift to international best practices on benchmark reference rate frameworks. It lays the foundation for further developments such as term rates, KESONIA-linked financial products, and a domestic derivatives market.
Where will KESONIA be published?
  • KESONIA will be published daily by the Central Bank of Kenya on its official website and included in relevant market data feeds and reports.
Does the KESONIA framework apply to existing loans and previously negotiated agreements?
  • The revised Risk-Based Credit Pricing Model (RBCPM) will take effect from September 1, 2025, for all new variable rate loans. As for existing variable rate loans, the revised RBCPM will take effect from February 28, 2026, at the end of a 6-month transition period for finalisation of the necessary arrangements.

Download KESONIA FAQs in PDF

KESONIA (%)



Daily KES Interbank Activity Report



 

Historical Interbank Rates
Historical Interbank Rates and Volumes
Key New CBK Indicative Exchange Rates
US DOLLAR 129.2399
STG POUND 170.2865
EURO 149.5306
More...
Posted On: 11-11-2025
Key Rates
Central Bank Rate 9.25% 07/10/2025
KESONIA 9.2320% 10/11/2025
CBK Discount Window 10.00% 07/10/2025
91-Day T-Bill 7.792% 10/11/2025
REPO 9.25% 15/10/2025
Inflation Rate 4.58% September,2025
Lending Rate 15.07% September,2025
Savings Rate 3.77% September,2025
Deposit Rate 7.63% September,2025
KBRR 8.9% 27/06/2016