The National Treasury surpassed its borrowing target for the weekly sale of Treasury bills by 5.83 per cent.
Data by the Central Bank of Kenya show that bids worth Sh25.4 billion were received for the three-month, six-month and one-year government debt securities last week, against a target of Sh24.billion.
T-bills are short-term instruments the government uses to raise cash to offset deficit in the budget.
During the week, CBK received bids worth Sh30.41 billion, indicating an oversubscription for the short-term government securities.
This, the government’s fiscal agent said, indicated increased investor activity associated with conclusion of the festive season.
Last week’s auction saw the National Treasury rake in 65.04 per cent more than the Sh15.39 billion worth of bids accepted during the January 4 auction.
Since September, CBK has been missing its target at the auction, citing reduced investor participation as a result of political uncertainties.
On September 28, the government raised Sh12.71 billion under the debt facility, slowing down to Sh8.37 billion on October 19– a week before the election rerun which saw President Uhuru Kenyatta emerge as the victor.
Bids received rose at the next auction on November 30 to Sh17.35 billion before increasing marginally to Sh18.49 billion at the December 28 auction.
During last week’s sale, bids worth Sh4.83 billion for the 91-day T-bills were received, representing 120.75 per cent of the Sh4 billion offered under the debt facility. Average interest on the three-month paper dropped marginally to 8.049 per cent compared to 8.080 per cent recorded the previous week.
CBK accepted bids worth Sh10.42 billion against a target of Sh10 billion it offered in the six-month T-bills, representing a 104.2 per cent subscription rate. The average interest on the 182-day T-bill also declined marginally to 10.661 per cent from 10.685 the previous week.
For the one-year paper, CBK received bids worth Sh10.15 billion, a 101.5 per cent subscription of the Sh10 billion on offer more than double of the Sh4.66 billion received last week.
Average interest on the 364-day Treasury bills recorded a slight increase to 11.170 per cent from 11.162 per cent recorded the previous week.
In its weekly report, CBK said the volume of bonds traded increased by 206.49 per cent for the week ending January 11, signaling increased investor participation in the market after the festive season.
“Similarly, the deals traded increased to 186 from 110 in the previous week,” the report stated.
The weekly report also noted improved trading activity in the stock market.
“The equity price indices and the number of shares traded increased, signaling an improvement in investor confidence,” the report stated.