Kenyan banks swamp debt market as COVID-19 slows down economic activities
Nairobi/Xinhua: Kenya's short-term government securities received the highest subscription in history this week as banks swamped the debt market with bids amid reduced economic activities due to the COVID-19 pandemic.
The 91-, 182- and 364-day Treasury bills attracted subscriptions of up to 950 percent, with bidders mainly going for the 91-day paper, the Central Bank of Kenya (CBK) said on Friday on auction results.
During the auction, the apex bank put up for sale 91-day bills worth 4 billion shillings (about 38 million U.S. dollars) and received bids worth 379 million dollars, an uptake of 948 percent.
The CBK floated 182- and 364-day papers worth 100 million dollars each and received bids worth 273 million dollars and 206 million dollars respectively.
David Luusa, the bank's director of financial markets, said total bids received topped 860 million dollars for the bills worth 240 million dollars floated.
The CBK accepted bids worth 462 million dollars, nearly twice the money it had sought at low-interest rates of between 6 and 7 percent.
Analysts attributed the increased activities on the debt market to the impact of the COVID-19 pandemic, which prompts banks to shun risky investment in the private sector and to lend to the government for the short-term.
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