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Bond investors press for higher interest rates
The CBK’s decision to take up an amount higher than the targeted Sh50 billion also pointed to the expected increase in domestic borrowing target for the current fiscal year.
Investors in government securities have increased their pressure on the Central Bank of Kenya (CBK) to offer higher rates on new auctions, looking to take advantage of the government’s need to borrow heavily to fund a large fiscal deficit.
Last week’s Treasury bills auction saw investors demand 8.8 percent on the 91-day paper, which was a significant premium on the paper’s prevailing interest rate of 8.13 percent. The buyers put up offers of Sh1.96 billion, with the CBK settling for Sh1.95 billion at 8.12 percent on accepted bids.
