The Central Bank of Kenya (CBK) recently announced the results of the Treasury Bills auction for the 91-day, 182-day, and 364-day issues dated February 10, 2025. This auction attracted significant attention from investors, reflecting the prevailing economic conditions and investor sentiment in the country.
Auction Overview
The CBK offered a total of Kshs. 24 billion across the three tenors:
- 91-day T-Bill: Kshs. 4 billion
- 182-day T-Bill: Kshs. 10 billion
- 364-day T-Bill: Kshs. 10 billion
The auction received an overwhelming response, with total bids amounting to Kshs. 71.18 billion, representing a performance rate of 296.60%. The CBK accepted bids totaling Kshs. 59.74 billion, distributed as follows:
- 91-day T-Bill: Accepted Kshs. 9.93 billion
- 182-day T-Bill: Accepted Kshs. 15.08 billion
- 364-day T-Bill: Accepted Kshs. 34.73 billion
Interest Rates and Investor Sentiment
The weighted average interest rates for the accepted bids were:
- 91-day T-Bill: 9.1156%
- 182-day T-Bill: 9.5190%
- 364-day T-Bill: 10.7581%
These rates indicate a slight decrease compared to the previous auction, suggesting a marginal shift in investor expectations and market dynamics.
Implications for Investors
The high subscription rates, particularly for the 364-day T-Bill, demonstrate strong investor confidence in government securities as a secure investment avenue. The attractive interest rates, coupled with the government’s creditworthiness, make Treasury Bills a preferred choice for both individual and institutional investors seeking short-term investment opportunities.
Understanding Treasury Bills
Treasury Bills are short-term debt instruments issued by the government through the CBK to finance short-term liquidity needs. They are offered in three tenors:
- 91-day T-Bill: Matures in 3 months
- 182-day T-Bill: Matures in 6 months
- 364-day T-Bill: Matures in 12 months
Investors purchase these bills at a discount and receive the face value upon maturity, with the difference representing the interest earned.
How to Invest in Treasury Bills
Investing in Treasury Bills is a straightforward process:
- Open a CDS Account: Investors must have a Central Depository System (CDS) account with the CBK. This can be done through the DhowCSD portal or mobile application.
- Submit a Bid: Bids can be submitted electronically via the DhowCSD platform or through authorized agents. Investors can choose between competitive and non-competitive bids.
- Make Payment: Upon successful allocation, payment must be made by electronic transfer using the Real-Time Gross Settlement (RTGS) system.
- Receive Returns: Upon maturity, the CBK credits the investor’s bank account with the face value of the Treasury Bill.
Benefits of Investing in Treasury Bills
- Security: Backed by the government, Treasury Bills are considered low-risk investments.
- Liquidity: With short maturity periods, investors can access their funds relatively quickly.
- Competitive Returns: The interest rates offered are often higher than traditional savings accounts.
The recent Treasury Bills auction underscores the robust demand for government securities in Kenya. For investors seeking secure and short-term investment opportunities, Treasury Bills remain an attractive option.
If you’re interested in diversifying your investment portfolio with secure government securities, consider participating in upcoming Treasury Bills auctions. Stay informed by regularly visiting the Central Bank of Kenya’s official website for the latest auction announcements and results.
