Banks now hold 56.1 per cent of the total domestic debt up from 54.1 per cent at the beginning of the year, underlining their domination of government debt instruments market.
This is the largest growth in absolute terms by any investor category as reported by CBK.
Pension funds have seen their holdings of the domestic debt increase to 24.7 per cent of the total from 23.8 per cent at the commencement of the year.
Commercial banks have since January raised investments in government securities by Sh83.5 billion to a total of Sh789.7 billion last month.
This was the largest growth in absolute terms by any investor category as reported in the Central Bank of Kenya (CBK) weekly bulletin.
In percentage terms, the banks now hold 56.1 per cent of the total domestic debt up from 54.1 per cent at the beginning of the year, underlining their domination of government debt instruments market.
Earlier, the head of fixed-income at Nairobi-based investment bank Kestrel Capital Alexander Muiruri said banks had considerable liquidity from the beginning of the year which they used in bidding for the treasuries.
“What is clear is that the government took advantage of the favourable environment in terms of interest rates to borrow more. Banks had the liquidity to take advantage of that,” said Mr Muiruri.
Pension funds have seen their holdings of the domestic debt increase to 24.7 per cent of the total from 23.8 per cent at the commencement of the year.
This has translated into Sh37 billion more investments in the Treasury assets with a total of Sh347.7 billion in government paper.
At the same time, the amount of government securities held by insurance companies has fallen by the Sh3.9 billion to Sh125.3 billion as at the end of last month.
Government institutions and parastatals have been quite liquid this year pouring an extra Sh11.3 billion into the Treasury securities taking their total portfolio to Sh47 billion by the end of last month.
Some of the State-owned enterprises have been making profit in the past decade, thereby managing to make the savings.
In proportion terms, the parastatals had their investments rise to 3.4 from 2.8 per cent in January.
The situation has, however, been different for other investors including individuals, saccos and investment clubs whose holdings declined by Sh27 billion.
The group now has Sh95.7 billion worth of the Treasuries compared to Sh122.7 billion at the start of the year. This means that they hold an equivalent to 6.8 per cent compared to 9.4 per cent at the beginning of the year.
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