Kenya’s latest Treasury bills auction saw a massive oversubscription for the 91-day T-bill, with bids amounting to KSh 17.5 billion against an offer of KSh 4 billion, reflecting a performance rate of 437.41%. The overwhelming demand for the short-term security starkly contrasted with the tepid interest in longer tenors, where the 182-day and 364-day T-bills attracted bids totaling KSh 4.5 billion and KSh 2.25 billion, respectively.
The Central Bank of Kenya (CBK) accepted a total of KSh 23.64 billion across all tenors, slightly above the KSh 24 billion offered, with the 91-day T-bill accounting for the lion’s share at KSh 16.95 billion. The high demand for the 91-day paper, offering an average interest rate of 15.78%, highlights investors’ preference for short-term investments amid current economic uncertainties.
In contrast, the 182-day and 364-day T-bills recorded lower performance rates of 44.51% and 22.54%, respectively, indicating a cautious approach by investors toward longer-term commitments. The weighted average interest rates for the 182-day and 364-day T-bills were 16.63% and 16.84%, slightly adjusted from the previous auction rates.
The CBK’s decision to accept most of the bids reflects the government’s ongoing efforts to manage its liquidity requirements while balancing investor demand. The auction results also underscore the fluctuating appetite for different investment tenors as market participants navigate the prevailing economic conditions.
Looking ahead, the CBK has announced the next Treasury bills auction, scheduled for September 9, 2024, with KSh 24 billion on offer. The upcoming auction will be closely watched to gauge whether the trend of favoring shorter-term securities continues.
