Investors have oversubscribed to the one-year treasury bills issued by Central Bank, with CBK receiving bids totaling to KSh39.77 billion.
This, therefore, saw CBK to take KSh36.8 billion of the amount, although it had only advertised for KSh10 billion.
Business Daily reports that the yields on the short-term treasury bills declined to 8.147% and 9.828% compared to the last auction for the 182- and 364-day bills respectively. However, the 91-day interest rates remained at 7.2%.
The market is pricing in that the government is under pressure to meet its domestic target and is placing its bets on the longer-dated T-bills, which currently is offering attractive yields.
Churchill Ogutu, Researcher at Genghis Capital Ltd
The high demand for short term government bonds is good news for Kenya’s treasury which aims to close the budget deficit gap through a mix of domestic and external borrowing.
Other treasury bills that were subscribed to include the 91-day and 182-day bills. With these, CBK received KSh629 million and KSh2.399 billion respectively. However, it had advertised for KSh4 billion and KSh10 billion respectively.
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