Demand for the government short-term debt fell to the lowest level in more than a year after uncapping loan rates despite return on three- and six-month papers going up.
Central Bank of Kenya (CBK), the State fiscal agent, received bids worth Sh13.846 billion against Sh24 billion offered to investors during weekly auction last Thursday. This represents a 57.69 percent subscription during the week banks were required to meet statutory cash reserve ratios, a sharp slide from 132.55 percent the week before.
This came amid ongoing sale of 10-year Sh50 billion bond in the primary market with analysts forecasting a medium to high subscription for the sale which closes on November 19.
Demand for the 91- and 182-day T-bills continued be low despite average interest rates rising to months high during the week.
The three-month paper was subscribed 28.23 percent with bids worth Sh1.13 billion coming through against Sh4 billion on offer.