Capital Markets

T-bills uptake improves for second week on liquidity

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Central Bank of Kenya (CBK). FILE PHOTO | NMG

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Summary

  • Data by Central Bank of Kenya (CBK) shows investors bids on the 91, 182 and 364-day papers totalled Sh31.59 billion against the Sh24 billion target. The government took up Sh29.99 billion.
  • The interest rates on the T-bills increased by an average of 4.9 basis points.
  • The performance of the T-bill auctions has in the past two weeks been on an upward trend, recovering from an eight-week run of under subscriptions.

The uptake of Treasury bills increased for the second consecutive auction last week on the back of higher liquidity due to government payments to counties and agencies.

Data by Central Bank of Kenya (CBK) shows investors bids on the 91, 182 and 364-day papers totalled Sh31.59 billion against the Sh24 billion target. The government took up Sh29.99 billion. The interest rates on the T-bills increased by an average of 4.9 basis points.

The performance of the T-bill auctions has in the past two weeks been on an upward trend, recovering from an eight-week run of under subscriptions.

CBK data shows that liquidity in the market has been going up, with commercial banks’ excess reserves (in relation to the 4.25 percent cash reserves requirement) standing at Sh18.3 billion last week, up from Sh14.8 billion the previous week.

The average interbank rate has also gone down, now standing at 2.49 percent compared to 3.75 percent at the beginning of the month.

The liquid market also saw investors bid Sh69.14 billion in this month’s Sh50 billion Treasury bond sale, which was a dual tranche offer consisting of reopened 20-year and 25-year bonds first sold in 2011 and 2018 respectively. The government took up Sh60.03 billion.