T-bill yield rises but sale flops

The weighted average yield on Kenya's 364-day Treasury bills rose to 13.0 per cent in a massively under-subscribed sale on Wednesday from 12.431 per cent at the previous auction in June, the Central Bank said. At the same auction, the yield on 182-day Treasury bills also rose to 11.415 per cent from 11.091 per cent last week.

Investors put in bids worth Sh184 million for the 1-year paper, a 6 per cent subscription rate, and the bank accepted them all. The bank received a 50 per cent demand for the Sh2 billion worth of six-month paper on offer, accepting just Sh994 million shillings. Commercial banks, the main buyers at the primary debt auctions, have been shifting their cash into Term Auction Deposits offered by the Central Bank. On Wednesday, the return on the 28-day repurchase agreement was 16.4 per cent , making the Treasury bill rate unattractive, trader said. Next week the bank said it would offer 91-day and 182-day Treasury bills worth 6 billion shillings next week.