Sharp Daily
No Result
View All Result
Sunday, September 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 Investments

Surging Demand for 91-Day Treasury Bills Leads to Unprecedented Yield Inversion

David Musau by David Musau
August 7, 2023
in Investments, News
Reading Time: 2 mins read

In a striking development in the financial markets, the yields on the 91-day Treasury Bills have surged, surpassing those of the 182-day T-bills, creating a rare inversion on the shortest end of the government’s yield curve. This unexpected situation has left the Treasury grappling with elevated finance costs in the short term, as the performance of the 91-day paper outpaces its longer-duration counterparts.

Recent auctions have witnessed a remarkable trend, with investors displaying an increased appetite for the shorter-duration 91-day Treasury Bills. As a result, the interest rate on the 91-day T-bill reached its highest level in the last nine years, while the rates on the 182 and 364-day papers are now at levels last observed in February 2016. During the most recent auction, the interest rate on the 91-day T-bill skyrocketed by 33 basis points to 12.68 percent, with the 182-day T-bill rising by 16 basis points to 12.55 percent. Similarly, the rate on the one-year paper surged by 38 basis points to 13.1 percent.

Read  more: Treasury Bills Record Poor Performance in Subscription of 38.1% from 164.5% recorded Last Week

This remarkable inversion has been triggered by a combination of factors. Analysts point to the exceptionally high demand for the 91-day Treasury Bill as a reflection of investor behaviour in response to the prevailing macroeconomic factors and concerns surrounding the government’s debt distress position. Seeking to safeguard their real rate of return, investors are opting for the 91-day paper as a short-term hedge, driving its yields to unprecedented levels. The current market dynamics indicate that investor aggression is further fueled by the government’s pressing need for debt amidst tough macroeconomic conditions. This environment provides an opportunity for investors to leverage their positions and demand higher yields across all government paper issuances.

RELATEDPOSTS

How public ratings could shift healthcare dynamics in Kenya

September 4, 2025

Why firms are shedding jobs despite survival

June 19, 2025

Looking ahead, market analysts predict that the yields on government paper will continue to rise, driven by a combination of factors such as inflation and increased domestic financing requirements. The recent surprise increase in the base rate to 10.5 percent from 9.5 percent during a June Monetary Policy Committee meeting has further signalled the likelihood of higher rates in the foreseeable future.

Read more: MPC Hikes Interest Rates to 9.5% from 8.75%

However, the Treasury now faces a significant challenge in managing its debt portfolio efficiently, as elevated finance costs pose potential risks to the fiscal budget. Due to this situation, striking a balance between short-term funding needs and long-term debt sustainability is crucial for the government to navigate through this period of heightened market volatility.

Email your news TIPS to editor@thesharpdaily.com

Previous Post

Kenya’s Coffee Export Volume Hits a 14-Year High, Boosting Economic Growth

Next Post

Smaller Banks Face Liquidity Struggles as Interbank Rate rises to 17.1%

David Musau

David Musau

Related Posts

Analysis

Alternative investments: Opportunities and risks

September 12, 2025
Investments

Mid-September momentum: CMMF posts strong yields and growing trust

September 12, 2025
News

September snapshot: CMMF yields 13.12% as month unfolds

September 5, 2025
Analysis

Why knowing your pension exit options matters, especially in the public sector

September 5, 2025
Private equity investment business concept
News

Private equity and insurance

September 4, 2025
Investments

Bank on your paycheck: Invest smart with CMMF

August 26, 2025

LATEST STORIES

Real Estate project financing models shaping successful developments

September 12, 2025

Alternative investments: Opportunities and risks

September 12, 2025

Mid-September momentum: CMMF posts strong yields and growing trust

September 12, 2025

Unlocking Home Ownership Through Retirement Savings in Kenya

September 12, 2025

The role of FDIs in driving sustainable development

September 11, 2025

How increased oversight can clean up the insurance sector without stifling innovation

September 11, 2025

Why retail investors hold the key to Kenya’s capital market growth

September 11, 2025

Kenya’s new banking policies: A turning point for the financial sector

September 11, 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