For the first time in months, investors have begun to show interest in the 182-day treasury bills at the weekly CBK auctions, which received bids worth KSh 9.4 billion out of KSh 10 billion on offer, a performance rate of 93.9%. All previous offers have been undersubscribed.
This is as bidders spread their risks from the short-term 91-day t-bills for a longer tenure 182-day paper.
The CBK has been on borrowing at higher costs with 91-day treasuries averaging 15.36%, 181-day averaging 15.42%, and 364-day at 15.64%, a fact that has attracted the attention from other quarters.
Following a rise in interest rates in the US, analysts expect Kenya’s borrowing costs to stay high. Unless the Kenyan government enacts austerity measures as seen in Malawi, the government will keep crowding out the private sector and increase debt servicing costs.
- Central Bank of Kenya (CBK) received total bids worth KSh 49.9 billion at the weekly treasury bills auction, out of KSh 24 billion on offer, a 208% oversubscription.
- The accepted bids were made up of KSh 32.4 billion in competitive bids and KSh 12.9 billion in non-competitive bids.
- The 91-day treasury bills continue to be the most attractive, receiving bids worth KSh 37.7 billion at this auction out of KSh 4 billion on offer, an oversubscription of 942.7%. with the state fiscal agent accepting bids worth KSh 33.2 billion.
The one-year treasury bills remained the least attractive debt instrument, with the monetary authority receiving bids worth KSh 2.9 billion out of KSh 10 billion on offer.
CBK offered an interest rate of 15.3%, 15.4%, and 15.6% for the 91-day, 182-day, and 364-day treasury bills respectively at this auction, an increase of 0.07%, 0.02%, and 0.02% compared to the prior auction.
Bids closure and the next auction are scheduled for 23rd November 2023 while results will be announced on 24th November 2023. CBK will be seeking for KSh 26.4 billion for loan redemptions.
ALSO READ: CBK Accepts KSh 61.2 B at Weekly Auction, 255.6% Oversubscription
