T-bills fall further, hope for interest rate decline
The Central Bank of Kenya. PHOTO | FILE
What you need to know:
Last week, the International Monetary Fund (IMF) said that interest rates were trending towards stability indicating that the high rates were only temporary.
The 182- and 364-day Treasury bill rates have come down in the latest auction, marking the third consecutive week of a decline.
In the latest auction, the 182-day T-bill rate declined by 4.21 percentage points to stand at 12.282 per cent while the 364-day paper was down by 3.51 percentage points to 13.62 per cent.
The rates also follow the trend shown in the three-month or 91-day government paper which is currently at 13.8 per cent following two weeks of consecutive falls.
Analysts have pointed out that the decline in the rates on government securities might mark the beginning of the end of the high interest rate environment in which lending rates have approached 30 per cent.
Last week, the International Monetary Fund (IMF) resident representative Armando Morales said that interest rates were trending towards stability indicating that they were only temporary.
“The high interest rates we have seen is a temporary phenomenon. It is not likely to go on for long. Already we have seen the rates on government securities going down. We are heading for stability in rates,” said Mr Morales.
