Latest data from the Central Bank of Kenya (CBK) shows the stock of debt fell to Sh2.527 trillion on December 28 from Sh2.563 trillion at the end of November.
In the four T-bill auctions done in December, the CBK was seeking Sh96 billion but only managed to raise Sh46.7 billion from a market that was affected by tight liquidity.
The government has been trying to lengthen the maturity profile of domestic debt by issuing longer bonds but has this month included a two-year tranche in its Sh40 billion offer in what analysts say is a bid to improve the uptake of the debt, especially among banks.
The outstanding stock of domestic debt shrunk by Sh36 billion in December on the back of huge maturities of Treasury bills coupled with under subscription in new offers.
Latest data from the Central Bank of Kenya (CBK) shows the stock of debt fell to Sh2.527 trillion on December 28 from Sh2.563 trillion at the end of November.
In the four T-bill auctions done in December, the CBK was seeking Sh96 billion but only managed to raise Sh46.7 billion from a market that was affected by tight liquidity.
During the month, total maturities across the three tenors of T-bills amounted to Sh93.7 billion, meaning that the Treasury made net repayments of Sh46.9 billion during the month.
As a result, the CBK data shows the outstanding stock of T-bills fell to Sh904 billion from Sh950 billion during the month of December, bringing down the total stock of domestic debt.
This has also meant the government is lagging behind in achieving its domestic borrowing target for the fiscal year at the halfway point of the period, analysts say, with bond issues also failing to hit the target as investors continue to shun long-tenor bonds the government has been issuing. “Net domestic borrowing in the current fiscal year has lagged behind — attributed to the long-end issues — at Sh58.85 billion against a possible Sh139.50 billion at the midpoint mark,” said Genghis Capital in a fixed income note.
The government has been trying to lengthen the maturity profile of domestic debt by issuing longer bonds but has this month included a two-year tranche in its Sh40 billion offer in what analysts say is a bid to improve the uptake of the debt, especially among banks.
The refinancing risk on domestic debt was seen to rise in recent months, with the share of domestic debt held in form of Treasury bills having risen to 37 per cent at the end of November from 34 per cent just two months earlier.
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