Moody’s expects Kenya’s debt burden to continue rising. FILE PHOTO | NMG
Summary
- Analysis by Kestrel Capital shows that in the current fiscal year, the total government securities maturities will top Sh1.068 trillion, compared with Sh1.05 trillion in 2016/17.
- This is, however, excluding maturities of short-term securities yet to be issued which will mature before June.
- In December, the maturing debt is topping Sh100 billion.
Heavy maturities of government debt coupled with Treasury
payments last week injected liquidity into the money markets to the tune
of Sh20 billion ahead of the festive period, pushing down the interbank
rate.
Latest Central Bank of Kenya (CBK) data shows
that there was a total of Sh75.7 billion injected into the money
markets, majorly through Treasury bond redemptions worth Sh32 billion
and government payments through its agencies and departments worth
Sh37.8 billion.
Liquidity
withdrawal on the other hand stood at Sh55.9 billion, the bulk in form
of Treasury bill sales of Sh18.1 billion, Sh12.7 billion worth of
reverse repo maturities and transfer of Sh24.5 billion in taxes held by
banks to the regulator.
“The average interbank rate
declined by 122 basis points to 6.47 per cent in the week. Interbank
volumes declined to Sh60.90 billion in the course of the holiday
shortened week.
Govt disbursements
"The improved market liquidity conditions has been attributed to
increased government disbursements in recent past,” said Genghis
Capital fixed income analyst Churchill Ogutu in a note.
“By
and large, the CBK kept at bay from market intervention activities in
the terrain of the week. Commercial banks’ excess reserves held at the
CBK increased to Sh7.4 billion from Sh7 billion the previous week.”
Analysis
by Kestrel Capital shows that in the current fiscal year, the total
government securities maturities will top Sh1.068 trillion, compared
with Sh1.05 trillion in 2016/17.
This is, however, excluding maturities of short-term securities yet to be issued which will mature before June.
By the end of November, the Treasury had managed to raise Sh540.9 billion against maturities of Sh465.8 billion.
Very popular
In December, the maturing debt is topping Sh100 billion.
In
addition to the Sh32 billion worth of Treasury bond that was redeemed
last week, the month sees Sh79 billion worth of Treasury bills falling
due for repayment.
This maturity is largely on the 182-day paper at Sh53 billion, compared with Sh13 billion apiece for the 91-and 364-day tenures.
The six-month paper has proven popular with investors this year, due to uncertainty over the direction of interest rates.
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