Govt raises Sh23.8b from Treasury bills after weeks of underperformance

The government last week raised Sh23.8 billion (US$229 million) from Treasury bills as it increased its appetite for the short-term loans amid renewed surge in subscription after five weeks of underperformance.

Treasury, as in the previous weeks, was out in the market to raise 15.98 billion (US$154 million) but ended up accepting the Sh23.8 billion, auction data from the Central Bank of Kenya (CBK) showed Friday.

Most of the money 15.98 billion (US$154 million) was raised from the 182-day paper which registered a 256 percent subscription, the highest in recent weeks. Interest rate on the paper stood at 10.6 percent, a marginal surge of 0.02 percent.

The government had sought Sh6 billion (US$58 million) from the security during the auction but ended up getting nearly three times more.

Similarly, the 364-day paper had a subscription of 129 percent as the T-bill attracted bids worth Sh7.7 billion (US$74 million) at an interest rate of 10.9 percent. Treasury accepted Sh6 billion from the papers, the money it had sought.

On the other hand, the 91-day paper underperformed, raising Sh3.6 billion (US$35 million) out of the Sh4.1 billion (US$39 million) it had sought. Treasury accepted Sh2.6 billion (US$25 million) from the bids at 8.6 percent.

Analysts noted that investors went for the 182-day security, making it outperform the others, because of its higher returns.

They further attributed the high borrowing by the government this week to cancellation of a two-year Treasury bond last week, after investors put bids that the CBK considered unrealistically above market rates.

The government had floated the 29.88 billion (US$288 million) paper for budgetary support.

Source: Xinhua

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