Why Treasury is hesitant to sell long-term bonds

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The National Treasury building in Nairobi in this picture taken on March 15, 2023. PHOTO | DENNIS ONSONGO | NMG

The Treasury has shied away from its policy of issuing long-dated bonds, seeking to avoid locking in higher debt service costs in a rising interest rate environment.

An analysis of the duration of bonds issued at primary auction in the first half of 2023 shows the papers had an average duration of 7.4 years in contrast with 12.9 years in the comparable period in 2022.

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Note: The results are not exact but very close to the actual.