The average interbank rate declined to 2.5 percent last week from 3.1 percent recorded the previous week according to stats compiled by Cytonn in their weekly report.
The average volumes traded in the interbank market rose by 32.0 percent to 14.4 billion shillings from 10.9 billion shillings the previous week.
The lower interbank rate last week pointed to the improved liquidity conditions, experienced during the start of the week partly attributed to government payments.
Liquidity, however, declined as at the end of the week, with the interbank rate rising to 3.3 percent as at 18th January 2018, from a low of 1.6 percent as at the start of the week, mainly attributed to tax payments due on 20th of every month.
Kenya Eurobonds
According to Bloomberg, the yields on the 5-year and 10-year Eurobonds issued in 2014 declined by 0.4 percentage points and 0.1 percentage points to 4.1 and 7.3 percent from 4.5 and 7.4 percent respectively.
Since the mid-January 2016 peak, yields on the Kenyan Eurobonds have declined by 2.3 percentage points and 4.7 percentage points for the 10-year and 5-year Eurobonds, respectively, an indication of the relatively stable macroeconomic conditions in the country.
For the February 2018 Eurobond issue, during the week, the yields on both the 10-year and 30-year Eurobonds declined by 0.3 percentage points and 0.1 percentage points to 7.9 and 9.0 percent from 8.2 and 9.1 percent the previous week, respectively.
Since the issue date, the yield on the 10-year Eurobond has increased by 0.4 percentage points while that of the 30-year Eurobonds has increased by 0.7 percentage points.