Sharp Daily
No Result
View All Result
Wednesday, May 14, 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

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

April 24, 2025

Kenya’s economic recovery in April 2025: Key trends and outlook

April 17, 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

Agriculture And Economy
News

Lets get Kenya out of FATF list

May 9, 2025
News

The downside of Impact Investing

May 2, 2025
News

Leadership challenges at the University of Nairobi

April 24, 2025
News

Easter eggs and earnings: Growing your nest egg with CMMF

April 16, 2025
News

Geoffrey Ruku declares KES 377M net worth during CS vetting

April 15, 2025
News

Butere girls teacher accused of altering play script with political content

April 14, 2025

LATEST STORIES

How AGOA and EPZs can transform Kenya’s trade

May 14, 2025

Safaricom forecasts earnings boost as Ethiopian losses shrink

May 14, 2025

Why Kenya must rebuild it’s textile legacy

May 14, 2025

Structuring private equity deals in Kenya

May 13, 2025

Money market funds: Smart saving and investing in Kenya

May 13, 2025

Kenya in May: Safari, coastline & deals you shouldn’t miss

May 13, 2025

Public Health Spending expected to grow in line with ethical development goals

May 13, 2025

NBA: Knicks, Pacers, Timberwolves near conference finals

May 13, 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