Can Money Market Funds Outperform Inflation in Kenya in 2026?

TL;DR: Most licensed Money Market Funds in Kenya are currently beating inflation in 2026. But they protect short-term savings — they don’t build long-term wealth alone.

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The Real Question Kenyan Salaried Workers Are Asking

“Is my Money Market Fund actually growing my purchasing power — or am I just earning numbers while prices keep rising?”

This isn’t theory. It’s rent, school fees, transport, and food costs.

MMF Returns vs Inflation in 2026

Metric	2026 Estimate
Average MMF Net Returns	8–10%
Kenya Inflation	4–5%
Real Return	3–6%

Real Return = MMF Return – Inflation

That means your savings are still increasing in real purchasing power.

Example: Teacher Saving KES 5,000 Monthly

• Saves KES 5,000 per month
• Earns about 9% net annually
• Inflation at 4.5%

Her savings grow roughly 4–5% above inflation yearly.

Why MMFs Are Still Beating Inflation

MMFs invest in:

• Treasury Bills
• Bank Fixed Deposits
• Commercial Paper

Returns adjust based on Central Bank of Kenya interest rates.

When This Strategy Does NOT Apply

MMFs are best for:

• Emergency funds
• Short-term goals (0–24 months)
• Parking cash safely

They are NOT best for:

• 20-year retirement investing
• Aggressive wealth growth
• High-risk, high-return strategies

Pros and Cons

Pros

• Low risk
• High liquidity
• Regulated by CMA
• Currently beating inflation

Cons

• Returns fall when CBK cuts rates
• Not strong for long-term growth
• Not government-insured deposits

Conclusion

For salaried workers in Kenya in 2026:
Money Market Funds are protecting and modestly growing your purchasing power.

But they should not be your only long-term wealth strategy.

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About the Author

Postine Ngeli is a Kenyan finance educator and founder of Money Market Hub Kenya, focused on practical and regulated investment education.

Disclaimer: This article is for educational purposes only and does not constitute financial advice. Investment returns and inflation rates change. Always conduct your research before investing.

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