The CBK had opted not to issue the heavily oversubscribed 182-day T-bill in early March, to avoid heavy maturities in six months by pushing investors to bid on the 91-day and 364-day papers.
Central Bank of Kenya (CBK) has announced that the 182-day Treasury bill will be back on offer this week after the State agent took the uncharacteristic move of suspending sale.
The six-month paper has not been auctioned in the last eight weeks, as the Treasury tried to spread maturity concentration risk across the three-month and one-year papers.
“Please note the 182-day Treasury bill will be on offer valued date May 8, 2017,” the CBK said in a notice.
The CBK had opted not to issue the heavily oversubscribed 182-day T-bill in early March, to avoid heavy maturities in six months by pushing investors to bid on the 91-day and 364-day papers.
At the time, the CBK had absorbed Sh87.10 billion against the Sh30 billion the paper offered in the previous five auctions. During the period, the Treasury had only raised Sh25.2 billion in the 364-day paper and Sh12.9 billion in the 91-day, out of the targeted Sh30 billion and Sh20 billion respectively.
This meant that the CBK had been left facing the prospect of having debt maturities pile up in six months’ time, instead of the usual even spread between the three papers — commonly referred to as concentration risk in the money market.
Cytonn Investments analysts in a weekly note said yields on T-bills were relatively unchanged in April, with the 91-day increasing to 8.8 per cent from 8.7 per cent while the 364-day paper remained unchanged at 10.9 per cent.
“The CBK has remained disciplined in stabilising interest rates in the auction market by rejecting bids priced above the market price, with the overall bids acceptance rate in April declining marginally to 79.2 per cent, compared to 82.1 per cent in March,” said Cytonn.
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