CBK (Central Bank of Kenya) received bids worth KSh81.41 billion at the second Treasury Bonds Auction conducted within a fortnight, in the month of September. The CBK was targeting to raise KSh60 billion for Budgetary support in this second auction.
The Re-Opened 20-year Treasury Bond, first sold in 2019 and maturing on 21st March 2039, was the most attractive, receiving bids worth KSh43,803.82 Million, a performance rate of 73.01% with the state fiscal agent accepting KSh33,456.74 Million and offering successful bidders a return or weighted average rate of 13.6799%.
The 30-year Treasury Bond, with 29.6 years left to maturity on 13th March 2056, received bids worth KSh37,601.48 Million, a performance rate of 62.67%. The CBK accepted KSh16,718.32 Million while rejecting the rest of the bids submitted for this debt instrument. CBK was offering a return of 14.2355%.
In June, Finance Minister John Mbadi said the budget deficit was forecast at 5.5% of gross domestic product in 2026/27. Typically, the fiscal budget is presented to parliament in June. Next year’s will, however, be presented earlier than that due to the General Elections scheduled in August 2027.
With the Government expected to lean on the domestic money market to plug the budget deficit, investment bankers maintain that high borrowing demands by the state will likely stay up, keeping consistent upward pressure on local yields over the medium-term despite high liquidity conditions.
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