By James Anyanzwa
The Government’s gross debt soared 4.7 per cent in the last three months, after the rise in Treasury Bonds and overdraft at the central bank.
The Government’s borrowing from the domestic market rose from Sh660.3 billion in June to Sh691.3 billion last month, while its cumulative expenditure on interest and other charges on domestic debt amounted to Sh14.5 billion in a similar period.
According to the Central Bank of Kenya’s weekly economic report, the increase in Government debt resulted from increases in Treasury Bonds and overdraft at CBK amounting to Sh39.9 billion and Sh3.0 billion, respectively.
This was, however, partly offset by decreases of Sh10.6 billion and Sh1.1 billion in Treasury Bills and other domestic debt, respectively.
Treasury Bonds increased from Sh448.6 billion, in June this year, to Sh488.5 billion, while overdraft rose from Sh17.6 billion to Sh20.6 billion as at September 24, 2010.
On the other hand Treasury Bills and other domestic debt declined from Sh159.0 billion and Sh34.2 billion, respectively, in June, to Sh148.4 billion and Sh33.1 billion, respectively, during the same period.
The 182-day Treasury Bills auction of September 30 posted an oversubscription of 93.15 per cent. The Government had offered 182-day Treasury Bills for sale, amounting to Sh6.0 billion, and received bids totaling Sh11.6 billion, of which Sh11.3 billion were competitive bids.
Inter-bank rate
The average rate for the 182-year Treasury Bills declined by 2.0 basis points from 2.113 per cent posted on September 20, to 2.093 per cent.
The average inter-bank rate declined by 5 basis points to 1.05 per cent in the week ending September 30, down from 1.10 per cent the previous week. The volumes traded increased marginally from Sh49.7 billion the previous week to Sh50.0 billion in the week ending September 30.
The Government deposits at the Central bank declined from Sh57.4 billion in the week ending September 23, to Sh51.7 billion in the week ending September 30.
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