Yesterday, the Central Bank of Kenya (CBK) auctioned 182 day Treasury bills worth KES 2 billion. For the bill the bank received 934 bids amounting to KES 1.2 billion which represents a subscription of 59%. Clearly, the trend of gross under-subscription for government securities as we observed at the last auction continued yesterday.

The CBK accepted all the bids offered by investors. The weighted average yield on the 182 bill was observed to be 10.327%; this is 0.588% lower than the yield observed at the previous auction.

The yields on government securities have been steadily decreasing since mid this month since the CBK started rejecting majority of the bids that would be received at auctions. This had an effect on the number of bids received in subsequent auctions. Once the Kenya shilling started depreciating against the US Dollar both the yield and the subscription rate have suffered declines.

The results of the auction are summarised below:

[caption id="attachment_8418" align="alignleft" width="783" caption="Image sourced from www.centralbank.go.ke"][/caption]

[caption id="attachment_8419" align="alignleft" width="782" caption="Image sourced from www.centralbank.go.ke"][/caption]

At today’s auction the CBK will offer 91 day worth KES 2 billion. It is expected that a lower yield and low subscription rate will be observed at today’s auction.