Yields on Treasury bills fall at auction

Photo Credit: www.mashada.com

Yields on Kenya’s Treasury bills fell at auction on as the 91 day Treasury bill yields dropped to 7.89% from 7.986% last week. The 182-day Treasury bill also dropped to 10.568% form 10.753%, the 364-day Treasury bill yield also dropped to 10.599 % from 10.894% according to records by the Bank according to the Central Bank.

This comes as commercial banks have been noted to record high demand for treasuries after the capping of lending rates under the Banking (Amendment) Act 2016.

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The Central Bank however experienced an 158.57% over subscription of the 91-day T-bill receiving 157 bids worth Ksh6.34 billion while it offered Ksh4 billion. The bank accepted bids worth KSh5.35 billion.

The 182 and 364 day bills were offered for a total of Ksh12 billion, receiving bids worth 10.67 billion, representing 167.77% subscription from the 182 day bill and bids amounting 10.67, representing a 177.90% subscription for the 364 day bill.

Lending rates are now capped at 4% above the Central Bank Rate (CBR) which was slashed to 10% on Tuesday, leading to a drop in interest rates to 14% from 14.5%.

By: Humphrey Ngugi  H_NGUGI



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