Nairobi, July 23 -- The Treasury has cut its target for net domestic borrowing for the fiscal year ending next June by Sh132 billion, reducing the risk of crowding out the private sector in access to credit and easing pressure on borrowing costs.

The target for net domestic financing has been lowered to Sh898 billion from Sh1.03 trillion, just a month after the 2026/27 Budget Statement was presented on June 11.

The Treasury will instead borrow more from foreign markets to offset the reduction in domestic borrowing from banks, pension funds and insurance firms through Treasury bills and bonds, underscoring improved prospects for securing external financing.

The cut in domestic borrowing is expected to increase the pool of funds availabl...