The Central Bank of Kenya(CBK) Treasury bills auction of November 26th, 2020 received bids worth KSh 15.4 billion. This is against an advertised amount of KSh 24.0 billion, representing a performance of 64.3%.
This is the first time the weekly auction has been undersubscribed over the past three weeks, signalling a decline in interest from investors in Government paper.
The most popular instrument was the 91-day Treasury Bill which was oversubscribed, raising KSh 4.6 Billion against an advertised amount of KSh 4 Billion.
The 182 day Treasury Bill attracted bids worth KSh 6.4 Billion out of the advertised KSh 10 Billion. The 364 day Treasury Bill attracted the lowest amount of KSh 4.5 Billion out of the KSh 10 Billion offered at the auction.
According to the CBK Weekly Bulletin, interest rates on all the Treasury bills tenors remained stable, only rising marginally.
Interest rate on the 91-day increased marginally to 6.73% in this auction from 6.706% at the previous auction. The 182-day and the 364-day Treasury Bill also rose slightly to 7.193% and 8.151% respectively from 7.152% and 8.094% at the last auction.
The next auction date and bids closure is on 3rd December, and KSh 24 Billion worth of TBills will be on offer.
The Kenya Shilling lost value against major international and regional currencies during the week ending November 26th, 2020.
It exchanged at KSh 109.86 against the greenback, compared to KSh 109.32 against the US$.
The CBK weekly bulletin shows that bonds turnover increased by 12.4% during the week ending November 26th, 2020. In the international market, yields on Kenya’s Eurobonds declined by an average of 41.1 basis points.
Global financial markets sentiment was positive during the week ending November 26 on account of news of a third Covid-19 vaccine, formal announcement of the commencement of presidential transition process in the US, and the planned easing of lockdowns in Europe.
International oil prices increased during the week, driven by positive vaccine news. Murban oil price rose to US$ 48.57 per barrel on November 26th November 2020 from US$ 44.56 per barrel on November 19th, 2020.
At its last Monetary Policy Committee(MPC) meeting held on November, 26th 2020, the CBK maintained the policy rate at 7%,
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