Interbank Rate Drops To 2.1% As The 2014 Eurobond Dips By 0.2%

The interbank rate slightly dropped to 2.1 percent from 2.3 percent recorded the previous week.

According to the weekly report released by Cytonn Investments, the interbank rate enjoyed the favourable liquidity in the market.

During the week, commercial banks had their excess reserves standing at 9 billion shillings to the 5.25 percent cash reserves requirement (CRR).

The average volumes traded during the week in the interbank market dropped by 3.7 percent to 8.7 billion shillings from 9 billion shillings the previous week.

How are Kenyan Eurobonds performing? 

The yields on the 10-year Eurobond issued in the year 2014 dropped by 0.2 percentage points to 5.1 percent from 5.3 percent the previous week.

The decline on the yields of the 10-year Eurobond has been attributed to the increased demand for the emerging markets fixed-income securities after the pause by the US Fed in raising the benchmark interest rate.

For the Eurobond issued in February 2018, yields on the 10 and 30-year bonds dropped by 0.1 percentage points to 6.5 Percent and 7.8 percent from 6.6 percent and 7.9 percent.

For the newly issued dual-tranche Eurobond with 7-years and 12-years tenor, priced at 7 percent for the 7-year tenor and at 8 percent for the 12-year tenor, yields slightly dropped.

The yields on the 7-year tenor bond and that of the 12-year tenor bond dropped by 0.1 percentage points to 6.2 percent and 7.2 percent from 6.3 and 7.3 percent respectively.

Liquidity remains favourable

The liquidity market has remained favourable according to analysts from Cytonn Investments.

Last week, the interbank rate dropped to 2.1 percent from 2.3 percent the previous week.

The slight drop in interbank rate was supported by the commercial banks’ excess reserves that remained within the recommended bracket.

The commercial banks’ excess reserves stood at 9 billion shillings in relation to the 5.25 percent cash reserve requirement (CRR).

The average volumes traded in the interbank market dropped by 3.7 percent to 8.7 billion shillings from 9 billion shillings recorded the previous week.

Source: Cytonn Weekly Report