CBK discount window: 9.25% rate, rules and 2022–2026 history

Updated 12 November 2026

The CBK discount window is the Central Bank of Kenya’s overnight lending facility for banks, and its rate is 9.25%. That is 50 basis points (0.50 percentage points) above the central bank rate (CBR) of 8.75%, the spread set by the Monetary Policy Committee on 10 February 2026. Banks that run short of cash at the end of the day borrow from it against government securities. This guide explains how the discount window works, what changed in 2026 and how the rate has moved since 2022.

Updated 12 November 2026. Figures come from the CBK discount window rate table, CBK Banking Circular No. 1 of 2026 and the CBK key rates panel, checked on 12 November 2026.

What the CBK discount window is

Every day, banks settle payments with each other through their accounts at the CBK. A bank that ends the day short first tries to borrow from other banks on the interbank market, where the average overnight rate is published as KESONIA (8.7513% on 11 November 2026). If it cannot find funds there, it can turn to the CBK discount window, also called the overnight window, as a lender of last resort for that night.

Three features define the facility today:

• Price: CBR plus 50 basis points, so 9.25% while the CBR is 8.75%.
• Security: advances are secured by Government of Kenya securities, with a haircut, under rules in Banking Circular No. 6 of 2023 dated 29 August 2023.
• Who can use it: the circular is addressed to commercial banks and microfinance banks.

Because the discount window is dearer than the CBR, it acts as a ceiling for overnight rates. A bank will not pay another bank much more than 9.25% overnight if it can get cash from the CBK at that price. That ceiling, together with the CBK’s deposit operations at the lower end, forms the interest rate corridor around the central bank rate.

The 2026 change to the CBK discount window

Banking Circular No. 1 of 2026, dated 10 February 2026 and signed by Michael Eganza, Director of Banking and Payment Services, sets out what the MPC approved at its meeting that day:

1. the interest rate on the facility moved from 75 basis points above the CBR to 50 basis points above the CBR;
2. advances continue to be secured by Government of Kenya securities, subject to the haircut in Banking Circular No. 6 of 2023; and
3. the terms for the Intra-day Liquidity Facility (ILF) stay unchanged.

The CBK said the changes were designed to improve monetary policy transmission and build on reforms to its Monetary Policy Implementation Framework announced on 9 August 2023. They took effect immediately and replaced all earlier circulars on the subject.

CBK discount window rate history since 2022

The table sets the CBK discount window rate against the CBR on each MPC date. The CBR column comes from the CBK central bank rate table; the gap is our calculation.

The table tells the story of the reform. Until mid-2023 the discount window sat a punishing six points above the CBR, so banks avoided it. The August 2023 framework cut the gap to four points, it fell to three in June 2024, to 0.75 in April 2025 and to 0.50 in February 2026. The CBK discount window rate has been 9.25% at every MPC review since, including 8 April, 9 June, 11 August and 7 October 2026. The CBK table goes back to 2011 and shows how volatile the window once was: on 26 August 2011 it stood at 29.37%.

Why the CBK discount window matters to borrowers

You will never borrow from the discount window yourself, but its rate filters into what you pay. A narrow, cheap window keeps overnight interbank rates close to the CBR, so a change in the CBR passes faster into KESONIA, Treasury bill yields and, over time, the rates banks charge on loans. A wide, expensive window let interbank rates swing far from the policy rate, which weakened the CBR’s grip on lending.

That link is still slow. CBK data shows the average commercial bank lending rate was 14.4% in September 2026 even with the CBR at 8.75%, which is why Treasury has pressed banks to cut (see our report on lending rates). For how the benchmark itself is set, read the central bank rate guide, and for the overnight benchmark that many new loans now track, see KESONIA explained.

Where to check the CBK discount window rate

The CBK key rates panel, shown on most pages of centralbank.go.ke, lists the discount window rate with its effective date (9.25%, 7 October 2026 on the latest check), next to the CBR, KESONIA, the 91-day T-bill rate and inflation. The full history is under Rates, then Discount Window. The next chance for a change is the MPC meeting on 9 December 2026; see our preview of the next MPC meeting. Savers can follow the knock-on effect on yields in the T-bill and money market fund rates tracker.

Frequently asked questions

What is the CBK discount window rate now?

9.25%, which is the central bank rate of 8.75% plus 50 basis points. The CBK key rates panel dates it to 7 October 2026.

How is the discount window rate set?

As a fixed spread over the central bank rate. Since 10 February 2026 the spread has been 50 basis points, down from 75 basis points, under CBK Banking Circular No. 1 of 2026.

Who can borrow from the CBK discount window?

Commercial banks and microfinance banks, to whom the circular is addressed. Loans are overnight and must be secured by Government of Kenya securities.

What is the difference between the discount window and the CBR?

The CBR is the policy rate that signals the stance of monetary policy. The discount window rate is the price of the CBK’s overnight lending to banks, set above the CBR to cap interbank rates.

What is the Intra-day Liquidity Facility?

A separate CBK facility that gives banks liquidity during the business day. Banking Circular No. 1 of 2026 left its terms unchanged.