Last week, the government coffers were liquid with the total cash accepted from auctions amounting to Sh50.1 billion. The 91- and 364-day T-bills were oversubscribed to a total of nearly Sh20 billion against an offer of Sh14 billion. A 20-year infrastructure bond brought into the Treasury Sh27.6 billion.
The central government’s emergency borrowing from the Central Bank of Kenya (CBK) has fallen sharply, signalling the Treasury’s success in raising money from the markets in the latest auctions.
The borrowing, which is an overdraft to the Treasury, stood at Sh8.43 billion compared to the previous week's Sh25.17 billion.
The amount incurred through the facility had been rising for four weeks consecutively up to November 2. In the two weeks preceding October 19, the national government had incurred little credit from the CBK but it started rising thereafter, according to data from the monetary authority.
Last week, the government coffers were liquid with the total cash accepted from auctions amounting to Sh50.1 billion. The 91- and 364-day T-bills were oversubscribed to a total of nearly Sh20 billion against an offer of Sh14 billion. A 20-year infrastructure bond brought into the Treasury Sh27.6 billion.
The borrowing by the Treasury through the overdraft is supposed to be restricted to a maximum of five per cent of the most recently audited revenues and must be repaid by the end of the fiscal year.
The CBK lends to the central government whenever the latter has liquidity shortage, easing such urgent payment requirements as salaries and other recurrent expenditure such as debt repayments.
The Treasury tends to incur most of the CBK debt when its auctions have failed to attract adequate bids from investors. At other times, the CBK refuses to accept bids it deems too expensive.
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