This archive report was first published on 19 September 2019.
On September 19, 2019, the Central Bank of Kenya (CBK) took up the entire Sh32.6 billion bid from investors for this month's Treasury bond issue, at a rate of 12.5 and 12.6 for the two 15-year bonds.
The bonds, which sought to raise Sh50 billion, were undersubscribed due to the CBK's aggressive mop up of liquidity, resulting in a tight market.
According to Churchill Ogutu, a senior research analyst at Genghis Capital, the acceptance of aggressive bids may be linked to the CBK's decision to step up mopping up liquidity.
On Monday, the CBK mopped up Sh56.2 billion from the money market through repurchasing agreements (repos).
Regional economist Jibran Qureishi noted that the CBK was keeping an eye on significant redemptions in government securities, which forced it to clean the plate.
The two bonds were supposed to meet redemptions of Sh46.2 billion, but the CBK has faced considerably high domestic debt redemptions in September 2019 at Sh123 billion compared to Sh92 billion in August.
