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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

High bidding pushes down yields on Kenya’s T-bills 

NAIROBI (Xinhua) -- High bidding on Kenya’s Treasury bills has pushed down yields on the short-term papers by up to 1.5 percent in the last two weeks.

Interest rates on the bills have been on the downward trend since the start of September, with the worst hit being the 182 and 364 days securities, according to the latest Central Bank data.

In this week’s auction, the Central Bank put up for sale 91-day Treasury bills worth 40 million dollars at an interest rate of 8 percent, down from 8.1 percent in the previous week and 8.3 percent in the Sept. 1 auction.

There was high bidding for the offers during the auctions, with this week’s 40 million offer attracting a subscription of 225 percent.

“The total number of bids received amounted to 90 million dollars. The number of bids accepted amounted 41 million dollars,” said the bank in auction results received Saturday.

Similarly, high bidding has characterized the 182 and 364 days bills, with yields standing at 10.8 percent and 10 percent respectively this week, down from 11.1 percent and 11.5 percent at the start of the month.

In this week’s auction, the CBK put up for sale 182 and 364 days bills worth 59 million dollars each.

Analysts have attributed the high bidding to commercial banks, which have switched to the government securities following the signing of a law capping interest rates.

The banks are seeking to cash in on the current yields before they fall to safeguard their profits after interest charges were limited at 4 percent above the Central Bank rate (10.5 percent).

 

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