Last week’s auction of the 91-day Treasury bills saw only a 1.31% rise in the interest rate from 10.54% in the week ended 15^th June to 10.68% last week. Meanwhile, the 182-day commercial paper marginally increased to 10.86% during last week’s auction up from 10.74% the previous week.

Demand for the short-term securities remained low, with total bids amounting to Ksh 2.9 billion versus Ksh 4.0 billion offered for sale reflecting a performance rate of 73%. This may be attributed to reduced interest in the securities due to low interest rates which hit a high of 21% in January this year with subscriptions reaching up to 140% in the same period for the 91-day Treasury bills.

With Treasury bills under-subscribed, the government continued to curb liquidity using the sale of re-purchase securities and term auction deposits thereby mopping up Ksh 3 billion and Ksh 6 billion respectively.

Meanwhile, the Government offered for sale Ksh 5 billion in 10 year discounted fixed-rate bonds. The 10 year bond attracted bids worth Ksh 4 billion which reflected a performance rate of 81%. Bids worth Ksh 0.4 billion were accepted for the same.