The government on Thursday missed out on multi-billion long-term loans after investors failed to subscribe to the government's treasury bonds.
The Central Bank of Kenya announced that the government securities only managed to attract Ksh14 billion in offers from investors out of a target of Ksh25 billion.
By this, the bond subscription made a 59.92 per cent in performance, a significant drop from the previous months where the bonds received huge offers.
According to CBK, out of the Ksh14 billion offered by the investors, the government only accepted Ksh10 billion.
The money was meant to cover up for a budget deficit for different government projects such as infrastructural development and payment of government workers.
An under-subscription of the securities depicts a change in the investors' appetite for the govt securities as the investors in a move driven by a demand for higher interests in loans offered to the country.
The under-subscription of treasury bonds was also attributed to a change in the government's monetary policy that has immensely affected the investors.
Treasury bonds under subscription come a week after the CBK announced a drop in the short-term loan offers by investors.
On April 26, the Central Bank announced an under-subscription of the treasury bills after the government received Ksh23.6 billion in offers out of a target of Ksh24 billion.
According to the Central Bank, the undersubscription represented a 98.2 per cent performance of the t-bills, which was against the government's 100 per cent target.
"The Treasury bills auction of April 25 received bids totalling Ksh23.6 billion against an advertised amount of Ksh24.0 billion, representing a performance of 98.2 per cent," stated part of the weekly bulletin by the central bank.
“Interest rates on the 91-day, 182-day, and 364-day. Treasury bills remained relatively stable,” CBK added.
