The government raised Sh28.62 billion, 19.25 per cent more than the Sh24 billion target, from auction of Treasury bills on Wednesday, the Central Bank of Kenya said yesterday in an update.
The CBK, the government’s fiscal agent, said the sale of six- and 12-month securities surpassed the target, while that for three-month paper underperformed. Bids worth Sh3.13 billion were accepted from the sale of 91-day T-bills against Sh4 billion target at an average interest of 8.54 per cent, which is slightly lower from 8.61 per cent the previous week.
The sale of 182-day T-bills raised Sh13.92 billion against a target of Sh10 billion at an average rate of 10.36 per cent, nearly flat compared to 10.37 per cent previously.
About Sh11.57 billion was, on the other hand, raised from the auction of one-year paper against Sh10 billion target at an unchanged average interest of 10.91 per cent.
Analysts at Cytonn Investments said in a weekly report that banks have increased their holdings in government securities to 55 per cent, or Sh1.1 trillion, from 51.1 per cent, or Sh1 trillion, at the beginning of the year.
“The increase is equivalent to 23.3 per cent on an annualised basis, indicating that banks find it better to lend to the government than to the private sector due to the interest rate cap,” Cytonn said based on data for last week.
The government raises cash for short-term budgetary support through the T-bills.