(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
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).