Treasury struggles to raise funds in the market

National Treasury building in Nairobi. FILE
National Treasury building in Nairobi. FILE PHOTO | NMG 

Treasury bill uptake continued to trend downward last week due to tight liquidity and investor response to political uncertainties.

The auction fell short of the Sh24 billion target by Sh12.79 billion, with the Treasury accepting Sh10.93 billion from the Sh11.209 billion bids received.

The overall subscription rate for the three government papers came in at 46.70 per cent.

Central Bank of Kenya (CBK) in a weekly statistical bulletin said a similar weak performance was noted in the Treasury bill and bond primary auctions in the previous week.

Auctions of 91-, 182- and 364-day papers dated October 16, were subscribed at 42.74 per cent against a total amount offered of Sh24 billion.

“The 91-day paper yield was 8.078 per cent against 8.097 per cent recorded in the previous week, while the 182-day paper yielded at 10.314 per cent against 10.316 per cent in the previous week. The 364-day paper was at 10.985 per cent against 10.989 recorded during the earlier week,” an update from CBK published Friday indicated.

The three-month, six-month and one-year government papers came in at 41.82 per cent, 45.88 per cent and 49.48 per cent respectively.

The three-month paper attracted bids worth Sh1.672 billion against a target of Sh4 billion. Treasury accepted Sh1.637 billion from bids received.

The six-month paper attracted bids worth Sh4.587 billion against a target of Sh10 billion with Treasury accepting Sh4.386 billion from bids received.

The 364-day tenor attracted bids worth Sh4.948 billion against Sh10 billion target. Treasury took Sh4.912 billion from what was received from interested investors.