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.