Average Interbank Volumes Dropped To Ksh 3.8 Billion

Last week, liquidity in the money market increased leading to a decrease in the average interbank rate to 1.9 percent from 3.0 percent recorded the previous week.

The average interbank volumes decreased by 7.3 percent to 3.8 billion shillings, from 4.1 billion shillings recorded the previous week.

Liquidity was mainly supported by government payments and maturing Term Auction Deposits (TADs) of 125.4 billion shillings (TADs are used when the securities held by the CBK for Repo purposes are exhausted or when CBK considers it desirable to offer longer tenor options).

As per the Central Bank of Kenya, commercial banks’ excess reserves came in at 29.8 billion shillings in relation to the 4.25 percent cash CRR.

The favorable liquidity since March 2020 has also partly been attributable to the reduction of the Cash Reserve Ratio (CRR) to 4.25 percent, from 5.25 percent previously, by the Monetary Policy Committee (MPC) during its March 2020 sitting.

The MPC, in March, freed up 35.3 billion shillings in form of additional liquidity to commercial banks for onward lending to distressed borrowers during the COVID-19 pandemic.

Eurobonds

According to Reuters, the yield on the 10-year Eurobond issued in June 2014 increased by 0.1 percentage points during the week to close at 6.5 percent from 6.4 percent recorded the previous week.

The yields on the 10-year Eurobond issued in 2018 increased by 0.1 percentage points to close at 7.5 percent from 7.4 percent recorded the previous week.

The yield on the 30-year Eurobonds issued in 2018 remained unchanged at 8.4 percent similar to what was recorded the previous week.

The yields on the 7-year Eurobond and 12-year Eurobond issued in 2019 increased by 0.2 percentage points and 0.1 percentage points, respectively to 7.4 percent and 8.2 percent from 7.2 percent and 8.1 percent recorded the previous week, respectively.

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