The Central Bank of Kenya (CBK) Treasury Bills auction was oversubscribed for the second consecutive week, albeit at a lower rate compared to the previous week.
The CBK received KES 26.41 billion in bids against an offer of KES 24.00 billion, representing an overall subscription rate of 110.0% compared to 122.6% in last week’s auction.
The 91-day paper recorded the strongest demand, attracting bids worth KES 7.32 billion against a target of KES 4.00 billion, representing a subscription rate of 183.1%.
The 364-day paper posted a subscription rate of 112.4% after receiving bids worth KES 11.2 billion against a target amount of KES 10.00 billion. Meanwhile, investor appetite for the 182-day paper waned. The bill received KES 7.85 billion in bids against an offer of KES 10.00 billion, translating to a subscription rate of 78.5%, down from 145.2% recorded in the previous week.
The CBK accepted KES 26.38 billion, translating to an acceptance rate of 99.9%.
CBK T-Bill Yields Edge Higher
Yields trended upward across all tenors, with the 91-day paper recording the largest increase. The yield on the 91-day paper rose by 12.81 basis points to 8.3176%, marking the fifth increase in a row. Meanwhile, yields on the 182-day and 364-day papers increased by 0.23 basis points and 4.86 basis points to 8.2123% and 8.5631%, respectively.
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Looking forward, the Treasury bill yields are expected to remain elevated amid mounting inflationary pressure driven by higher energy prices due to the US/Israel-Iran conflict. Locally, the Energy and Petroleum Regulatory Authority (EPRA) increased petrol and diesel prices for the May 15- June 14 pumping cycle by KES 16.65 and KES 46.29 per litre, respectively.
