T-bills oversubscribed in Kenya’s liquid money market

High liquidity in the money markets continues to prevail. Appetite for Treasury Bills last week was at Kes. 33.7 billion against an offered amount of Kes.24 billion. This trend of bids exceeding offers has resulted in the yields on these short-term securities reducing by an average of 40 basis points since January 2019. We believe that this downward shift on interest rate levels will persist for the first quarter of 2019.

Money market accounts are highly liquid assets in the sense that they can be quickly converted into cash without losing value. In fact, except for limits on the availability of recently deposited funds, money market account deposits are available for immediate withdrawal

Diaspora remittances have exhibited remarkable growth cumulatively over 12 months as at January 2019. According to the Central Bank statistics, inflows have grown by 36% to USD 2,733 million from USD 2,013 million over a similar period in January 2018.

This would then account for the Shilling’s stable position during this period. The Shilling was stable against the Dollar (USD) with slight depreciation of 0.1% during the last week. The domestic equity and bond markets have shown steady return year to date despite some slight weakness experienced last week as reflected by the Nairobi All Share Index (NASI).