DOMESTIC DEBT

Treasury misses its target on T-bills sale for the fourth week

Uncertainty in global markets and disruptions arising from the impact of coronavirus has seen investors shy away from the short term debt securities

In Summary

•CBK received bids worth Sh17.9 billion for the three, six-month and one-year government paper

•During the weekly auction, the CBK- the government’s fiscal agent accepted bids worth Sh15.66 billion

The Central Bank of Kenya.
The Central Bank of Kenya.
Image: FILE

Subscription of Treasury Bills fell short of the Sh24 billion offered by Central Bank of Kenya during this week’s auction.

CBK received bids worth Sh17.9 billion for the three, six-month and one-year government paper.

Uncertainty in global markets and disruptions arising from the impact of coronavirus has seen investors shy away from the short term debt securities and instead opting for longer term debt.

The government’s fiscal agents received bids worth Sh10.75 billion during Thursday’s auction, slightly more than the Sh10 billion on offer for the one-year T-bills.

For the six-month paper, investors placed bids worth Sh2.67 billion, against a target of Sh10 billion while the three-month paper raised Sh4.47 billion against the Sh4 billion on offer.

Uptake of the government securities started on a high in the month of April with subscriptions hitting Sh27.05 billion, more than the Sh24 billion on offer.

This was before declining to the lowest subscription rate in the month, on April 9, when investors placed bids worth Sh8.54 billion, representing a 35.58 per cent subscription rate.

During the weekly auction, the CBK- the government’s fiscal agent accepted bids worth Sh15.66 billion.

In April, of the Sh120 billion on offer for the 91,182 and 364-day T-bills on offer the Central Bank accepted bids worth Sh84.95 billion to shore up the state’s fiscal deficit.

“The actual amount to be realised from the auction will be subject to National Treasury's immediate liquidity requirements for the week. Where several successful bidders quote a common rate, the Central Bank of Kenya (CBK) reserves the right to allot bids on a pro-rata basis,” CBK said.