Investors’ demand for Treasury bonds increased every week, reaching a record level in 2024.
Demand for short-term 91-day notes remains weak as investors continue to weigh long-term risks, but changes to the longer term could be carried over to lower yields.
The 91-day notes attracted bids worth Ksh18.5 billion, compared to bids of Ksh4 billion. The 182-day and 364-day notes were tendered at Ksh28.9 billion and Ksh25.7 billion respectively, with maturities of Ksh10 billion.
Profits have fallen across the board and have continued to fall since the central bank began the cycle in August. Treasury yields typically fall ahead of the decision and fall further after the rate cut.
The yield fell below the 16.35% level, with 14.99% for the 91-day contract, 16.095% for the 182-day contract and 16.34% for the 364-day contract. Compared to the last week of July, 91-day, 182-day and 364-day newspapers fell by 6.3%, 4.5% and 3.4% respectively.
The slower decline in long-term 364-day bond yields than in 91-day bond yields reflects a normalization of the yield curve over the medium term. Insurance competition is similar to what investors want to do to make real profits.
Even though the central bank’s required reserve ratio (CBR) was lowered, the government’s high financing needs will hinder the CBK’s efforts to lower interest rates to reduce borrowing costs.
During an economic slowdown and slowdown, the central bank has cut interest rates by a total of 100 basis points in its last two monetary policy meetings. Inflation is well under control and close to the lower end of the target; the September figure fell to 3.6%.
