T-BILLS

Investors rush for short-term state debt

T-bills are short-term instruments the government uses to raise cash to offset budget deficits.

In Summary

•Bids worth Sh46.85 billion were received for the three-month, six-month and one-year government debt securities this week, against a target of Sh24.billion

Central bank of Kenya./FILE
Central bank of Kenya./FILE

The National Treasury surpassed its borrowing target for the weekly sale of Treasury bills by 91.67 per cent during this week’s auction.

Data by the Central Bank of Kenya show that bids worth Sh46.85 billion were received for the three-month, six-month and one-year government debt securities this week, against a target of Sh24.billion.

T-bills are short-term instruments the government uses to raise cash to offset budget deficits.

This shows increased appetite for the short-term government debt from both local and international investors.

During the week, CBK accepted bids worth Sh21.55 billion, Sh2.45 billion short of what was on offer.

This was an uptick compared to last week’s auction where CBK only accepted Sh15 billion of the Sh54 billion received.

Since January, the Treasury has borrowed Sh262.05 billion through 91,182 and 364-day T-bills as it seeks to bridge the 2019/20 budget deficit currently at Sh639.9 billion.

The fiscal deficit for 2019/20 will be financed by net external financing of Sh331 billion, domestic borrowing of Sh305.7 billion and other net domestic receipts of Sh3.2 billion.