The month of August came to an end on a positive note with T-Bills registering an oversubscription though slightly lower than what was registered in July.
During the month of August, T-bill auctions recorded an oversubscription, with the overall rate coming in at 104.7 percent compared to 134.8 percent recorded in the month of July.
The subscription rates for the 91-day, 182-day, and 364-day in August came in at 126.8, 45.8, and 154.8 percent respectively, lower than the 131.1, 64.0, and 207.0 percent recorded in July, respectively.
The yields on the 91-day declined by 0.2 percentage points to 6.4 percent, from 6.6 percent previously, while the yield on the 182-day paper declined by 0.4 percentage points to 7.0 percent, from 7.4 percent in July.
The yield on the 364-day paper, however, rose by 0.2 percentage points to 9.2 percent from 9.0 percent in July.
The T-bills acceptance rate came in at 86.3 percent during the month, compared to 95.6 percent recorded in July, with the government accepting a total of 86.7 billion shillings of the 100.5 billion shillings worth of bids received.
The Central Bank of Kenya (CBK) remained disciplined in rejecting expensive bids in order to ensure stability of interest rates in August.
During the week, T-bills were undersubscribed, with the subscription rate coming in at 78.4 percent up from 71.6 percent the previous week.
The under-subscription is partly attributable to tightened liquidity in the money market during the week.
The yield on the 91-day and 182-day papers remained unchanged at 6.4 percent and 7.0 percent, while the yield on the 364-day paper rose by 14.4 bps to 9.4 percent.
The acceptance rate rose to 95.1 percent from 89.2 percent recorded the previous week, with the government accepting 17.9 billion shillings of the 18.8 billion shillings bids received.
The 91-day T-bill is currently trading at a yield of 6.4 percent, which is below its 5-year average of 8.6 percent.
The lower yield on the 91-day paper is mainly attributable to the low-interest-rate environment that has persisted since the passing of the law capping interest rate.
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