Short-term rates head south at the auction on improved liquidity

Short-term rates head south at the auction on improved liquidity

Short-term interest rates have continued on a downward trend as the weekly Treasury bill auction attracts huge oversubscription. During the last auction, overall subscription stood at 214.71 per cent, with auction receiving Sh51.53 billion bids against an offer of Sh24 billion.

All the tenors of Treasury bills on offer were oversubscribed.

Interest rate on the three Treasury bills declined further during the weekly auction, with 91-day tenor interest rate falling to its lowest level in years at 7.7 per cent.

“In the week’s auction, CBK (Central Bank of Kenya) went against the recent trend by virtually accepting all the bids on offer. This was attributed to the lacklustre performance of the month’s primary bond, which was also held in the week and coupled by the need to meet the demands of the maturity which is scheduled today,” analysts at Genghis Capital told the Business Daily.

The CBK accepted Sh50.89 billion of the Sh51.52 billion bids received against the Sh24 billion on offer. The 91- , 182-day and 364-day tenors recorded a performance rate of 136.55 per cent, 171.46 per cent and 289.22 per cent respectively.

Yield on the 182-day tenor remaining under the 10.00 per cent mark. “Yields on 91-, 182-, and 364-day papers came in at 7.725 per cent, 9.666 per cent and 10.537 per cent respectively,” the CBK data showed.

The 91-day tenor attracted bids of Sh5.4 billion against an offer of Sh4 billion, with CBK accepting the entire amount.

The 182-day tenor attracted bids worth Sh17.1 billion against an offer of Sh10 billion, CBK accepted Sh17.07 billion from investors.

The 364-day tenor investors offered Sh28.92 billion against an offer of Sh10 billion, CBK accepted Sh28.35 billion from investors.

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