Investors offered the government bids worth Sh40.84 billion for Treasury bills floated during this week’s auction.
According to data by the Central Bank, this represents a 170.20 per cent oversubscription of the Sh24 billion on offer.
Oversubscription of the 91, 182 and 364-day T-bills points to improving market liquidity from last month.
This also propelled the average interbank rate at 3.25 per cent for the week ending January 24, an increase from 2.24 per cent reported last week.
Treasury accepted Sh26.53 billion, with the weighted average interest rate of accepted bids coming in at 7.1, 8.8 and 9.9 per cent respectively.
The 364-day T-bills attracted the highest bids amounting to Sh25.16 billion.
The week’s auction brings total bids accepted by the government to Sh120.39 billion for the four weeks in January with bids oversubscribed at 137.6 per cent, 281.6 per cent, 161.4 per cent for weeks ending January 3, 10 and 17.
According to real estate investment firm Cytonn, high demand for treasury bills since the beginning of the year indicates the government’s ability to raise domestic debt while keeping rates low by rejecting expensive bids.
Treasury also received bids worth over Sh.100 billion for the two- year and 15-year tranches of Bond on offer but only took up Sh38.49 billion.