Kenya’s Short-term Treasury Bills under-subscribed by 42.7pc

Kenya’s short-term treasury bills were under-subscribed at 42.7 percent on Thursday compared to  63.2 percent previously as the liquidity in the market remained tight.

Yields on the 91, 182 and 364-day papers remained unchanged at 8.1 percent, 10.3 percent and 11.0 percent, respectively.

The overall acceptance rate came in at 95.5 percent, compared to 87.0 percent the previous week, with the government accepting a total of Kshs 9.8 bn of the Kshs 10.3 bn worth of bids received, against the Kshs 24.0 bn on offer in this auction.

The government is behind its domestic borrowing target for the current fiscal year, having borrowed Kshs 51.0 bn, against a target of Kshs 118.3 bn (assuming a pro-rated borrowing target throughout the financial year of Kshs 410.2 bn budgeted for the full financial year as per the Cabinet-approved 2017 Budget Review and Outlook Paper (BROP)).

Liquidity in the money market remained relatively tight during the week, with a net liquidity injection of Kshs 0.3 bn, compared to a net injection of Kshs 2.2 bn the previous week.

The bulk of the liquidity injection came from Reverse Repo Purchases of Kshs 30.6 bn as the CBK looked to counter the high liquidity reductions brought about by Reverse Repo Maturities and Transfer from Banks – Taxes, of Kshs 35.8 bn and Kshs 24.4 bn, respectively. 

Source: Cytonn Investments