The Central Bank of Kenya(CBK) accepted bids worth KSh 43.6 billion at the Weekly Treasury Bills Auction conducted this Thursday 17th August 2023 after receiving bids worth KSh 44.7 billion, an oversubscription of 186%.
The most attractive instrument offered to investors was the 91-day Treasury Bills which attracted bids worth KSh 38.2 billion out of KSh 4 billion on offer, an oversubscription of 955.74% with the CBK accepting KSh 37.1 billion.
The CBK offered an interest rate of 13.5 % for the three-month instrument compared to 13.1% at the previous auction as the continues to pay more to make its debt instruments attractive.
With returns from the equities market remaining low, owing to flight by foreign investors due to a fall in the Kenya Shilling exchange rate against the US Dollar, investors are now opting for the more lucrative fixed-income treasury bills and bonds market.
The least attractive debt instrument at this week’s T-bills auction was the long term one year bills which received bids worth KSh2.6 billion out of KSh 20 billion on offer with the CBK accepting the entire amount.
The CBK also accepted bids worth KSh 19.1 Billion at the sale of new 2-year and re-opened 5-year Treasury Bonds sale where it floated bonds worth KSh 40 billion and received bids worth KSh 53 billion, an oversubscription of 132.5%, The CBK rejected most of the bids despite an overwhelming subscription rate at the August bond tap sale.
The CBK offered a coupon rate of 16.9% and 16.9% for the two-year and five-year Treasury Bonds, making them attractive to investors seeking for higher yields.
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