T-bills subscription rates rose in August as liquidity eased

Interest rates on short-term government treasuries edged up in the month of August due to improved liquidity in the market.

During the month, T-bills subscription rates rose to an average of 113.3 percent, compared to 63.8 percent experienced in July.

The subscription rates for the 91, 182 and 364-day papers came in at 74.5 percent 122.3 percent and 119.7 percent from 59.9 percent, 76.5 percent and 52.6 percent the previous month, respectively.

The yield on the 91-day paper decreased to 8.1 percent from 8.2 percent in July, whereas yields on the 182 and 364-day papers remained unchanged at 10.3 percent and 10.9 percent, respectively.

“The Central Bank of Kenya (CBK) remained disciplined in stabilizing interest rates in the auction market by rejecting aggressive bids that were priced above market, and the market responded, leading to a rise in the overall bids acceptance rate for T-bills to 95.9% during the month, compared to 87.4% in July, with the government accepting Kshs 104.3 bn of the Kshs 108.7 bn worth of bids received, against the Kshs 120.0 bn on offer, indicating bids are largely within ranges CBK deems acceptable,” noted Cytonn Investments.