The Central Bank of Kenya(CBK) took KSh 22.621 Billion at the weekly Treasury Bills Auction out of bids worth KSh 22.624 from investors.
This represented an undersubscription of 94.27%, the first time the auction is underperforming since mid- February 2021.
What CBK had offered at the auction
The CBK had offered the 91-days, 182-days and 364-days Treasury Bills amounting to KSh 24 Billion.
The one-year Treasury Bills was the most attractive, with investors putting in bids worth KSh 12.2 Billion. This is against KSh 10 Billion that was on offer, an oversubscription of 121.92%.
The 91-days Treasury Bills auction raised KSh 4.3 Billion out of the KSh 4 Billion on offer, an oversubscription of 108.75%.
The 182 days Treasury Bills was the least attractive, with the Government’s fiscal agent collecting KSh 6.1 Billion out of the KSh 10 Billion that had been offered at the auction. This represented a performance of 60.82%.
Returns on the 91-days T- Bill remained unchanged at 7.024% at this auction compared to the 182-days T- Bills, whose interest rate moved to 7.832% compared to 7.765% at the last auction.
The 364-days Treasury Bills offered the highest returns at 9.144% compared to 9.071% at the previous auction.
The next T-Bills auction and bids closure is on Thursday 18th March 2021, with results announced the next day.
The auction will be seeking to raise KSh 29,038.70 for redemptions and KSh 5,038.70 for new borrowings/net repayments.
Amounts raised will, however, be subject to National Treasury’s immediate liquidity requirements for the week.
In the March 2021 sale of the re-opened 10-year and 20-year Treasury Bonds, the CBK offered KSh 50 Billion with bids worth KSh 48.3 Billion accepted out of KSh 48.7 Billion received from investors. This represented a performance rate of 97.41%.
The coupon rate was 12.438% and 13.200% for the 10 year and 20-Treasury Bonds, respectively. The re-opened bonds, first sold in 2019 and 2018, also had a performance rate of 31.79(10-year Treasury Bond) and 65.62%( 20-year Treasury Bond).
CBK will use these funds from the Treasury Bonds sale for new borrowings/net loan repayments.