Demand for Kenyan Treasuries seen low

Kenyan Treasuries are likely to be met by low demand at next week’s sales as demand in the money markets has already largely been met, traders said.

The central bank will sell Treasury bills of all maturities at two separate auctions next week to raise a total of Sh12 billion ($114.07 million).

“Next week’s auctions will likely not be subscribed very well unless there’s significant government spending as liquidity has been locked up due to the successful September bond auction,” said Alex Muiruri, fixed income trader at Kestrel Capital.

The central bank raised Sh25 billion through the sale of a one year Treasury bond this week, amid a severe shortage of liquidity that has sent overnight interest rates higher.

Traders said the yield on the 182-day Treasury bill was likely to jump at next week’s auction after the yield of the 91-day bill surged at this week’s sale.

The weighted average yield on the 91-day Treasury bill climbed to 18.607 percent while that of the six-month bill rose slightly to 14.551 percent.