The rate of returns that investors are getting from treasury bills has continued to fall without relenting. In the latest issue, T-Bills rate has fallen below 9 percent for the first time since October 2022.
The 91-day T-Bill rate is now at 8.9697 percent which is the lowest rate it has been in two years and four months. The results issued for the latest auction by the Central Bank of Kenya further show that the this rate was previously at 9.1156 percent.
The other T-Bills rate for the 182-day and 364-day papers have also been on the decline. In the latest set of results from the Central Bank, the 182-day T-Bill has a return of 9.4100 percent while the 364-day treasury bill has a return of 10.594 percent.
The rates have been falling consistently over the past few months after hitting highs of 15 percent. For instance, in October 2024, the 182-Day T-Bill had a return of 16.6 percent while the 364-Day T-Bill had a return of 16.8 percent.
As at December 2024, the 91-day T-Bill’s rate stood at 10.0311 per cent. This was a sharp fall from the rate of 15.7 per cent that was recorded as at October 3, 2024.
Man deported by Uhuru gets multi-billion Ruto affordable houses deal
The actual returns from making investments in T-Bills will be much lower given that returns on T-Bills are usually subjected to a 5 per cent withholding tax.
“Treasury bills are a secure, short-term investment, offering you returns after a relatively short commitment of funds,” the CBK states.
“Treasury bills are sold at a discount. This means that investors choose the amount that they will receive when the bill matures, or the face value of the bill, and pay less than that amount when purchasing it.”
Currently, only investors with active CSD accounts are eligible to buy treasury bids. For instance, in the upcoming auction, the CBK requires that bids must be submitted and received by CBK electronically via DhowCSD or Treasury Mobile Directly. Payments must then be made by electronic transfer using RTGS.
