Treasury eyes Ksh.40 billion from local borrowing in December

The National Treasury has set Ksh.40 billion as its local borrowing target during the month of December.

The Central Bank of Kenya (CBK) which executes the government’s local borrowing program on behalf of the fiscal agent has re-opened two bonds tenured at 6.8 and 13.5 years respectively.

The CBK will be seeking to tie up investors to the bond to low interest rates floating the bonds coupon rates at a modest 11 and 12.7 per cent respectively.

The Treasury will be looking to close the year on a high having marked gains from investor preference for government securities over alternative investment classes.

In November, the exchequer collected a Ksh.61.7 billion windfall including Ksh.8 billion from a bond’s tap sale as investors’ appetite for the securities remained elevated.

Treasury’s net domestic financing through the first quarter of the 2020/2021 financial year was Ksh.16.2 billion above targets at Ksh.152.4 billion to mirror the abundant investor appetites.

The government is expected to tap an estimated Ksh.600 billion from the local debt market by the end of June 2021.