The fall has been linked to the government being ahead of its domestic borrowing target for the current fiscal year, having borrowed Sh385 billion against a target of Sh271.9 billion.
The 91-day Treasury bill has slipped below its five-year average of 9.4 per cent thanks to the low-interest rates environment and ample liquidity.
Market analysts have linked this to the government being ahead of its domestic borrowing target for the current fiscal year, having borrowed Sh385 billion against a target of Sh271.9 billion.
“In May, yields on the 91-day paper decreased to 8.5 per cent from 8.8 per cent at the end of April, while the 364-day paper remained unchanged at 10.9 per cent driven by high subscription rates as the markets remained relatively liquid,” said Cytonn Investments in a monthly note.
The T-bills subscription rates remained high and in May rose to 168.9 per cent from 131.8 per cent in April due to the high liquidity.
The subscription rates for the 91-day and 364-day papers during the month came in at 230.8 per cent and 128.3 per cent respectively, from 125.1 per cent and 138.6 per cent the previous month.
The 182-day paper came back to the auction after an eight-week absence, with the yield on the paper declining to 10.4 per cent from 10.5 per cent in March.
The subscription rate for the paper came in at 184.8 per cent from 403 per cent in March.
In early March, Central Bank of Kenya opted not to issue the heavily subscribed 182-day paper, as it looked to avoid heavy maturities in six months’ time by pushing investors to bid on the three-month and one-year papers.
Last week, subscription for the three papers remained high increasing to 157.5 per cent, compared to 141.9 per cent recorded the previous week.
Subscription rates on the 91-day, 182-day and 364-day papers came in at 209.2 per cent, 155 per cent and 139.3 per cent compared to 129.3 per cent, 150.7 per cent and 138.2 per cent the previous week, respectively.
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Note: The results are not exact but very close to the actual.
