The government raised KSh 486.5 million against the targeted KSh 20 billion in the July tap sale issue of the FXD1/2023/002, missing the target by 97%.
- Further, CBK accepted 99.8% of the bids with the average yield of accepted bids clocking 17.1%.
- Investors notoriously preferred the short-term T-bills pointing to investors’ demand for higher returns as a risk hedge coupled with jittery sentiments regarding the governments’ fiscal position.
- The laid-back approach mirrors a wait and see attitude over the trend of returns on the bonds market notwithstanding the cooling inflationary pressures.
Nevertheless, weekly treasury bills were oversubscribed for the first time in four weeks, with the over-subscription jolting higher to 124.4%% from 32% recorded the previous week.
The Central Bank of Kenya (CBK) accepted bids worth KSh 27.9 billion out of the KSh 29.9 billion received, reflecting a 93.4% acceptance rate.
Demand remained pegged on the 91-day paper, which attracted bids worth KSh 12.8 billion against the KSh 4 billion on offer, an oversubscription of 370.1%. The CBK however accepted KSh 12.8 billion on this tenor.
Both the 182-day and 364-day papers saw substantial increases in subscription rates to 94.2% and 56.3% respectively.
The accepted average yields on the three papers saw an uptick from the previous week, increasing to 15.99%, 16.80%, and 16.83% for the 91-day, 182- day and 364-day papers respectively. This comes amid looming rate cuts with the inflation rate now trailing within the lower bound target range.
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