This archive report was first published on 14 January 2020.
On January 14, 2020, investors showed strong interest in Kenya's one-year treasury bills, with the Central Bank of Kenya (CBK) receiving bids worth KSh39.77 billion.
Despite only advertising for KSh10 billion, CBK accepted KSh36.8 billion of the bids, indicating a high demand for short-term government bonds.
According to Business Daily, the yields on the short-term treasury bills declined to 8.147% and 9.828% for the 182- and 364-day bills, respectively. However, the 91-day interest rates remained at 7.2%.
Market analysts believe that investors are pricing in the government's pressure to meet its domestic target and are placing their bets on the longer-dated T-bills, which currently offer attractive yields.
Churchill Ogutu, a researcher at Genghis Capital Ltd, noted, 'The market is pricing in that the government is under pressure to meet its domestic target and is placing its bets on the longer-dated T-bills, which currently is offering attractive yields.'
The high demand for short-term government bonds is seen as good news for Kenya's treasury, which aims to close the budget deficit gap through a mix of domestic and external borrowing.
