The Central Bank of Kenya (CBK) Treasury Bills were undersubscribed in week 18, marking the third consecutive week of undersubscription. The auction attracted bids worth KES 18.48 billion against an offer of KES 24.00 billion, translating to an overall subscription rate of 77%.
The 91-day paper was oversubscribed, albeit at a lower rate compared to the previous week. The paper received bids amounting to KES 8.02 billion against a target of KES 4.00 billion, representing a subscription rate of 200.6%, down from a subscription rate 230.9% in the previous week.
Investors’ appetite for the 182-day paper improved compared to the previous week. The paper received bids worth KES 3.26 billion against an offer of KES 10.00 billion, representing a subscription rate of 32.6%, up from 8.6% in the prior week.
Meanwhile, the 364-day tenor’s demand improved, with the subscription rate rising to 71.9% from 36.8% in the previous week. The paper attracted bids worth KES 7.19 billion against a target of KES 10.00 billion.
CBK T-Bills edge higher
Yields trended upward for the second consecutive week, with all tenors posting rates above 8.0%. The 182-day paper rose the most, increasing by 32.5 bps to 8.2115% from 7.8867% in the previous week. Yields on the 91-day paper and 364-day paper increased by 26.0 bps and 24.2 bps to 8.0398% and 8.5133%, respectively.
The upward trend in yields is largely driven by the expansion of the fiscal deficit under Supplementary Budget I, which has increased the government’s reliance on domestic borrowing, prompting for higher interest rates to attract investors.
