Nairobi, April 22 -- The government's raised domestic borrowing target for the 2025/26 fiscal year is unlikely to exert fresh pressure on interest rates, the Central Bank of Kenya (CBK) has said, noting that a large share of the projected Sh996 billion has already been tapped.

In its first supplementary budget for the 2025/26 financial year, the government raised the domestic borrowing target to Sh996 billion, up from the initially planned Sh635 billion. This marks an increase of Sh361 billion and has sparked fears of renewed pressure on interest rates.

The revised domestic debt target followed an expansion of the 2025/26 budget by Sh363.9 billion to Sh4.66 trillion, amid a wider revenue shortfall of Sh1.3 trillion. This has prompted he...