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Interbank Rate Dips To 10.99% Over Moderated Liquidity

BY Standard Investment Bank · December 4, 2023 03:12 pm

KEY POINTS

Subscription for the shorter 91-day paper waned to 484.97%, from 584.91%, in the previous week while that of the 182-day and 364-day papers increased to 26.98% and 19.66%, from 23.79% and 18.52%, in the previous week, respectively.

Liquidity in the money market moderated during the week as evidenced by the decline in the average interbank rate to 10.99%, from 11.17% in the previous week, partially due to end-of-month government payments which offset tax remittances.

However, volumes traded over the interbank market nearly halved to KES 13.71bn from KES 23.75bn, the previous week.

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The table below summarizes the market liquidity indicators:

Interbank

At the same time, the Central Bank maintained its support to liquidity-strapped entities by injecting KES 137.84bn through 7-day and 14-day reverse repo purchases at an average rate of 11.58% – the bid was to inject KES 150bn distributed over the week.

See the summary below:

Despite the relatively eased liquidity, subscriptions for treasury bills decreased to 100.26%, from 115.11%, in the previous week. The Central Bank received a total of KES 24.06bn in bids, with 80.62% geared towards the 91-day paper.

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Subscription for the shorter 91-day paper waned to 484.97%, from 584.91%, in the previous week while that of the 182-day and 364-day papers increased to 26.98% and 19.66%, from 23.79% and 18.52%, in the previous week, respectively.

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