Sharp Daily
No Result
View All Result
Wednesday, October 8, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home News

CBK rejects high bids, aims to lower interest rates

Austin Wekesa by Austin Wekesa
March 22, 2024
in News
Reading Time: 2 mins read

The Central Bank of Kenya (CBK) declined significant investor bids totaling KES 37.1 billion in this week’s Treasury bond auction, signaling its intention to reduce interest rates from their peaks of up to 18%.

The auction, comprising three bonds for March, included a reopened 3-year issue that closed on March 6th. Sales for the 5-year reopened bond and the issuance of a new 10-year bond closed on March 20th. From the total offer of KES 59.7 billion in bonds, the CBK accepted only KES 22.6 billion.

The rejection of high interest rates suggests a reduced urgency for government funds, opting to await market rate cuts. Particularly, the majority of rejections occurred in the auction of the 10-year bond, where investors sought an average 17.8% interest rate, above the government’s set 16% coupon rate.

Meanwhile, the 5-year bond was more receptive, with the government accepting bids at an average of 18.4%, slightly below the asking average of 18.6%.

RELATEDPOSTS

Real yields vs. nominal yields on Kenya’s government bonds

May 21, 2025

Kenya’s risk-based credit pricing: Five years on

April 24, 2025

Analysts interpret the CBK’s decision to set the 10-year bond’s coupon at 16% as a move towards lower yields. This is supported by factors such as the successful Eurobond 2024 issuance and a strengthened shilling, reducing market risk sentiment and indicating a downward trend in yields.

The KES 23.8 billion in offers for the 10-year bond reflects market belief that rate increases have peaked, leading to acceptance of longer-duration bonds.

Earlier in the month, the CBK rejected KES 8.8 billion of the KES 43.1 billion bids for the three-year bond, with accepted offers averaging 18.4% against an asking average of 18.5%.

Governor Kamau Thugge’s recent measures aimed at curbing aggressive interest rate bids from banks have provided the CBK with room to reject expensive offers in subsequent tranches.

Previously elevated interest rates reflected investor concerns about government risk, particularly surrounding the June Eurobond, which have since been partially alleviated. Additionally, successful fundraising from the February infrastructure bond has eased pressure on the CBK to meet the KES 422.7 billion domestic borrowing target outlined in the 2024 Budget Policy Statement.

Previous Post

Innovative strategies in insurance distribution

Next Post

Section of JKIA terminal temporarily closed after fire incident

Austin Wekesa

Austin Wekesa

Related Posts

News

Kenya Q2’ 2025 GDP growth accelerates to 5.0%

October 3, 2025
News

Argentina’s crisis and Kenya’s lessons on political economy and market confidence

September 25, 2025
News

Kenya’s financial system remains stable but faces rising risks

September 25, 2025
News

Where do Kenyan stock returns come from? A napkin framework

September 19, 2025
News

September snapshot: CMMF yields 13.12% as month unfolds

September 5, 2025
Private equity investment business concept
News

Private equity and insurance

September 4, 2025

LATEST STORIES

The economic and environmental gains of Kenya’s LPG shift

October 8, 2025

Equities, Bonds, or Fixed Deposits?

October 7, 2025

Kenya’s Inflation is creeping up, What it means for investors

October 7, 2025

The Role of Micro-Pensions Plans in Kenya

October 3, 2025

Understanding the link between international aid and cooperative finance stability in Sub-Saharan Africa

October 3, 2025

Kenya Pipeline Company IPO

October 3, 2025

Kenya Q2’ 2025 GDP growth accelerates to 5.0%

October 3, 2025

Kenya’s Regulated SACCOs Cross Trillion Shilling Mark

October 2, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024