Central Bank of Kenya(CBK) received bids worth KSh 47.9 billion at the Weekly Treasury Bills Auction, out of KSh 24 billion offered to investors with the CBK accepting bids worth KSh 47.8 billion. The most attractive instrument was the 91-day Treasury Bills which received bids worth KSh 41.8 billion out of the KSh 4 billion offered at this auction, an oversubscription of 1,004.62% with bids worth KSh 41.8 billion being accepted at this auction.
The least attractive debt instrument was the one-year Treasury Bills which received bids worth KSh 895 million out of the KSh 10 billion offered, an undersubscription of 8.95% with the CBK accepting bids worth KSh 883.7 billion.
The three-month Treasury Bills received bids worth KSh 5.3 billion out of the KSh 10 billion offered with the CBK accepting KSh 5.2 billion at this auction.
CBK OFFER TO BIDDERS
The rates of return offered by CBK to bidders were 13.1104%, 13.4381% and 13.3402% for the 91-day, 182-day and 364-day Treasury Bills compared to 12.6855%, 12.5579% and 13.1072% respectively at the prior auction.
The next weekly Treasury Bills auction and bids closure is 17th August 2023 while CBK will announce the results on 18th August 2023.
The Central Bank’s Auction Management Committee (AMC) meets at 4pm on auction days, and after considering all received bids, determines the cut-off rate and the successful weighted average of the accepted bids. The results from the auction are published, through Treasury Mobile Direct (TMD), Twitter and in our statistics section in the CBK website. While investors will typically receive Treasury bills in the amount they applied for, the Central Bank can issue bills for a lower amount.
Following the auction, investors need to call or visit the Central Bank or its branches to determine if their applications were successful and to determine how much they owe for their Treasury bills.
If one has submitted an application, it is extremely important to contact the Central Bank to determine what payment will be, as there will need to make that payment by 2pm on the following Monday or, if the Monday is a public holiday, the following Tuesday.
The payment period for an auction typically closes on the following Monday at 2pm. Investors can submit their payments, in the amounts specified when they contact the Central Bank, through cash or banker’s cheques for amounts under Kshs. 1 million and through a KEPSS transfer for larger amounts.
Successful applicants who fail to submit payments within the payment period can be barred from future investment in government securities.
At the end of the 91-, 182- or 364-day period, the face value amount of the Bill will be remitted into the commercial bank account indicated on the CDS account. Alternatively, An Investor may choose to rollover their securities into a new forthcoming issue and in this case, they have to complete application form giving rollover instructions and submit to Central Bank before closure of the period of sale for that bill.
The maturity date of the maturing security (investment) and the value date of the new Treasury bill must match for rollover instruction to be successful. The Bank therefore does not remit maturing proceeds into investor’s bank account but rather sends only refund amounts generated from the new investment.
