The high yields on the T-bills have seen investors rushing to take buy the securities – bringing Sh5.4 billion in the latest auction, according to the CBK.
“The CBK offered a total of Sh4 billion. The total number of bids received was 214 amounting to Sh5.14 billion, representing a subscription of 128.5 per cent. Total bids accepted amounted to Sh4.9 billion,” the regulator said in a statement.
The yields of the T-bills have been rising since June when the CBK raised its benchmark rate from 8.5 per cent to 10 per cent and later to 11.5 per cent.
Investors are currently focused on 91-day paper due to the current uncertainty in the interest rates regime.
On Tuesday, the CBK retained the base lending rate at 11.5 per cent noting that it was satisfied that the policies that it had put in place were working well to keep the inflation rate low.
DEFINITION: – A treasury bill is a short-term debt obligation issued by the government through the Central Bank of Kenya to raise money on short-term basis – 91, 182, 364 days. T-bills are sold to investors at discounted prices to reflect investor’s return and redeemed at face value.