The money market remained liquid last week with the average interbank rate coming in at 2.3 percent a marginal rise from 1.8 percent recorded the previous week.
The interbank rate during the week was below the 2019 average of 4.3 percent, mainly supported by government payments and maturing TADS of 162.2 million 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.
The average interbank volumes declined by 43.0 percent to 5.5 billion shillings from 9.8 billion shillings recorded the previous week.
As per the Central Bank of Kenya, commercial banks’ excess reserves came in at 10.9 billion shillings in relation to the 4.25 percent Cash Reserve Ratio.
During the week, Eurobond yields were on a downward trend mainly attributable to the improved investor sentiments attributable to the recent easing of coronavirus restrictions.
This is despite the continued surge in the coronavirus cases. According to Reuters, the yield on the 10-year Eurobond issued in June 2014 declined by 0.4 percent points during the week to close at 6.3% from 6.7% recorded the previous week.
The yields on the 10-year Eurobond issued in 2018 declined by 0.4 percentage points to close at 7.2 percent from 7.6 percent recorded the previous week.
The yield on the 30-year Eurobonds issued in 2018 also declined by 0.2 percent points to close at 8.3 percent, lower than the 8.5 percent recorded the previous week.
The yields on the 7-year Eurobond and 12-year Eurobond issued in 2019 declined by 0.3 and 0.4 percentage points, respectively to 7.2 and 7.9 percent from 7.5 and 8.3 percent recorded the previous week, respectively.
In the money markets, 3-month bank placements ended the week at 7.5 percent (based on what we have been offered by various banks) The yield on the 91-day T-bill declined by 0.3% points to close the week at 6.0 percent, from 6.3 percent recorded the previous week.The average yield of Top 5 Money Market Funds recorded declined marginally to 9.9 percent from 10.0 percent recorded the previous week.The yield on the Cytonn Money Market gained by 0.2 percent to close the week at 10.7 percent, higher than the 10.5 percent recorded the previous week. More Articles From This Author
