Central Bank has been keeping a tight lid on rates on government bonds in recent offers by rejecting expensive bids.
The Treasury has opened the sale of a new two-year bond and re-opened a 10-year issue in a bid to raise Sh30 billion for budgetary support.
The Central Bank of Kenya (CBK), the government’s fiscal agent, has announced that the sale will run until September 19.
Central Bank has been keeping a tight lid on rates on government bonds in recent offers by rejecting expensive bids.
The last bond issued in August, a new five-year and reopened 10-year paper, fetched rates of 12.46 and 13 per cent respectively, against bod averages of 12.55 and 13.18 per cent.
“The market will be keenly watching this auction to see if the CBK will allow the rate to rise further than during the last auction,” said Genghis Capital Ltd in a market brief.
Genghis said that the market will also be tracking developments on the political arena as the country heads to a repeat presidential poll next month, especially on how the government intends to raise the funds required for the exercise.
The IEBC has announced it requires Sh12 billion to conduct the upcoming polls, which could see the government’s appetite for local debt go up in order to fill this hole in the budget.
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