NAIROBI, Nov. 29 (Xinhua) -- Kenyan Treasury bills were massively undersubscribed for the first in months this week as commercial banks kept off the debt market following the repeal of law capping interest rates.
The undersubscription signals a shift in trend at the Kenyan debt market, where banks have been the dominant buyers of the securities for the last three years.
This week, the Central Bank of Kenya (CBK) put 91-day, 182-day and 364-day papers for sale as it sought to raise 24 billion shillings (240 million U.S. dollars).
The 91-day paper worth 40 million dollars attracted a subscription of 23 percent, raising 9.2 million U.S. dollars while the other two papers valued at 100 million U.S. dollars each raised 10 million U.S. dollars for the 182-day bill and 63 million U.S. dollars for the 364-day bill, the apex bank's auction data showed on Friday.
The decline in subscription happened despite interest rates for the paper surging to stand at 7.1 percent, 8.2 percent and 9.8 percent respectively.
Analysts noted that banks are divesting from the debt market as they reorganize their businesses following the repeal of a law capping of interest rates this month.