Investors increased their interest rate demands on short-term government debt past the 16 percent mark in last week’s Treasury bills sale, reacting to the move by the Central Bank of Kenya (CBK) to raise its base lending rate by two percentage points in its December 5 policy setting meeting.
The results of the weekly Treasury bills auction showed that the average rate demanded by investors on the 364-day paper stood at 16.41 percent, up from 15.79 percent the previous week. The CBK, however, rejected the expensive bids on the paper, with the average rate for accepted offers standing at 15.83 percent.
