The Central Bank of Kenya building in Nairobi. FILE PHOTO | NMG
The State failed to raise enough in Treasury bill auctions since
the beginning of the year to roll over maturing short-term debt despite
all the sales being oversubscribed, illustrating the growing burden to
refinance domestic debt.
Central Bank’s data shows that
the regulator accepted a total of Sh132.6 billion from investors in the
past five T-bill auctions, against maturities worth Sh144 billion.
In
the 2019/2020 fiscal year, the Treasury is in the market for Sh514
billion from the domestic market, comprising new borrowing of Sh391.4
billion and net repayments worth Sh122.6 billion.
T-bills
account for 29.7 percent of the Sh2.93 trillion domestic debt, with
this share having fallen from a high of 38.6 percent in October 2018.
Heavy maturities amid reduced demand by investors have contributed to
the fall.
In last week’s auction, the 91-day, 182-day
and one year papers together raised Sh36.2 billion bids, out of which
the CBK accepted Sh31 billion. Maturities for the week stood at Sh34.94
billion, meaning the government made net repayment of Sh3.9 billion.
Yields on all three tenors increased marginally by between 1.7
and two basis points to 7.296 percent for the 91-day, 8.229 percent for
the 182-day and 9.879 percent for the 364 day papers.
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