Treasury bill yields to ease on liquidity

Kenya: The yields on Kenyan Treasury bills are expected to continue edging lower next week on the back of increased shilling liquidity, traders have said.

The Central Bank of Kenya will auction 91-day, 182-day and 364-day Treasury bills worth a total Sh8 billion ($87 million). “The general trend downwards should persist... but not as aggressively,” Mathangani Kariuki, a bond trader at Kestrel Capital, said.

Kariuki said Treasury yields had slipped in recent weeks amid high liquidity as a result of increased Government spending and debt which had matured in February and March.

Government salary payments and allocations to regional authorities had led to increased liquidity in the market, traders said.

At this week’s sale, the weighted yield on the 91-day Treasury bills edged down to 8.453 per cent from 8.463 per cent last week, while the yield on 182-day T-bills also dropped to 10.356 per cent from 10.375 per cent.

The yields on the 364-day paper slipped to 10.636 per cent from 10.768 per cent. Some traders have previously said investors could wait for the sale of a 12-year infrastructure bond worth up to Sh25 billion on March 25, further adding downward pressure on Treasury bill yields.