Turnover at the bourse spiked on Tuesday to 3.3 billion shillings driven by trades on the infrastructure bonds with the most recent issues being the highest traded.
The rates were all below 13 percent signaling a shift past the psychological level of 13 percent, the next resistance level will be 12.50 percent for the infrastructure bonds.
Economic experts expect it will be rather more difficult to break the resistance level especially with expectations that the national treasury may issue a 5-year paper in the month of May.
So far, the curb on tenor has played out well for the Central bank enabling them to suppress rates but with the concentration risk building in the 1year to 3years tenors both in terms of maturities for the CBK and from the investor allocation perspective, a longer tenor bond issue seems inevitable before the end of the financial year 2016/17.
The overnight lending rate continued to rise hitting 6.83 percent on larger volumes of 29.0 billion shillings the crunch on liquidity is drawing out longer than expected but should ease off by the end of the week.