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Treasury leans on reopened bonds to tame cost of debt
In the current fiscal year, the Treasury has a net deficit of Sh901 billion, to be financed through domestic borrowing of Sh652.8 billion and external loans of Sh248.2 billion.
The Central Bank of Kenya (CBK) and the National Treasury are set to continue with their recent trend of reopening older bonds when raising fresh domestic debt, giving them control of the interest rates on the bonds amid elevated borrowing needs.
Reopened bonds pay investors a predetermined fixed interest rate (coupon) that was arrived at when the paper was initially floated in the market, unlike new bonds whose coupons are determined by investors’ bids.
