Treasury Bill Demand Jumps as Investors Bid KSh47.7B for KSh28B Offer
Key Highlights
- Investors submitted KSh47.7B for Kenya's latest Treasury bills, up from KSh41.7B in the previous auction, while CBK accepted KSh41.2B.
- Demand strengthened across two maturities, while accepted rates edged slightly lower.
Kenya money markets
Investors submitted KSh47.7B in bids for Kenya's latest three Treasury bill auctions against KSh28B offered by the Central Bank of Kenya's published auction result, up from KSh41.7B in the previous auction published by CBK on 28 September.
CBK accepted KSh41.2B in the latest sale, compared with KSh33.35B previously. Total bids equalled 170.42% of the amount offered, versus 149.02% in the previous auction. The figures show stronger overall demand for short-term government securities.
Where demand went
The 91-day bill attracted KSh17.98B in bids against an KSh8B offer, giving it a performance rate of 224.79%. The previous auction attracted KSh17.74B for the same maturity, according to CBK's 28 September results.
The 182-day bill received KSh19.15B against KSh10B offered, a performance rate of 191.47%. Its previous auction attracted KSh12.76B, so demand increased materially.
The 364-day bill received KSh10.59B against KSh10B offered, producing a performance rate of 105.86%. The previous auction received KSh11.23B, so demand eased slightly at the longest maturity.
CBK accepted KSh12.88B from the 91-day auction, KSh17.9B from the 182-day auction and KSh10.42B from the 364-day auction.
The rates investors accepted
The CBK result shows accepted rates of 8.7694% for 91 days, 8.8856% for 182 days and 9.0397% for 364 days.
The previous auction recorded 8.7781%, 8.8949% and 9.0431% respectively. Rates therefore edged lower while overall bidding increased.
That matters because the accepted rate is the return investors receive under the auction structure, while the maturity determines how long their money remains committed. The movement is also a useful signal of the current short-term cost of government borrowing.
Why the auction matters
Treasury bills are short-term government securities. Investors place money with the government for a specified maturity and receive the applicable return under the auction process.
Strong bidding means investors submitted more money than CBK offered. It does not mean every bid was accepted.
For savers and investors, the maturity matters as much as the rate. A 91-day bill ties up funds for a shorter period than a 364-day bill, while the longest maturity in this auction carried the highest accepted rate.
The next auction
CBK's Treasury bill schedule shows another KSh28B offer across the three maturities, with bids closing on 8 October and value date on 12 October.
The 91-day bill will again carry an KSh8B offer, while the 182-day and 364-day bills will each have KSh10B available.
The next result will show whether the stronger demand seen in the latest auction continues and whether accepted rates remain around current levels.
For investors, the useful comparison is the amount bid, the amount accepted, the accepted rate and the change against the previous auction.
In Summary
- How much was offered?
- CBK offered KSh28B across 91-day, 182-day and 364-day Treasury bills.
- How much was bid?
- Investors submitted KSh47.7B, up from KSh41.7B in the previous auction.
- Which bill drew the strongest demand?
- The 91-day bill received KSh17.98B in bids against an KSh8B offer.
- What comes next?
- CBK says the next KSh28B Treasury bill auction closes on 8 October.