Treasury receives bids totaling Ksh 78B - KBC

Treasury received bids totaling 78 billion shillings against the 50 billion shillings it was targeting to borrow from the domestic market last week.

The huge demand for the five and ten year bonds, points to a growing appetite for government papers due to better returns offered by the treasury.

The Central Bank of Kenya weekly report says last week’s auction pushed the government’s total debt on bills and bonds to 2.6 trillion shillings.

In the current financial year, the national treasury plans to borrow a total of 271 billion shillings to finance a gaping hole in the government expenditure plan.

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This has caused jitters in the domestic market with treasury’s Director General of Budget, Fiscal and Economic Affairs Geoffrey Mwau allaying fears of a debt crisis.

Last week, the government was in the local market seeking to borrow 50 billion shillings after borrowing another 60 billion shillings in January through bills and bonds.

During the auction that closed last week, the government received bids totaling to 78.3 billion shillings, almost 29 billion shillings more than it was willing to borrow.

The central bank says this has pushed the total domestic debt to 2.6 trillion shillings, while foreign debt stands at 2.7 trillion shillings, bringing the total public debt to 5.3 trillion shillings.

The budget policy statement before parliament projects that Kenya’s total debt portfolio is expected to reach 5.7 trillion shillings in the fiscal year 2019/2020 raising more concerns over its sustainability.

 

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