NAIROBI (Xinhua) --
Kenya’s internal debt has ballooned in the last three weeks to
hit over 18 billion U.S. dollars following increased uptake of
Treasury bills and bonds by the government.
government has stepped up sale of the securities and absorption
of bids from buyers as the appetite for the low-risk loans
soars, especially among commercial banks.
Latest data from the Central Bank of Kenya indicates
Wednesday that at the end of August, the internal debt stood at
17.8 billion dollars before rising to the current level
During the period, the government floated several securities
that were hugely oversubscribed by commercial banks, pushing up
the debt by at least 200 million dollars.
Last week in the Treasury bills auctions, the government
floated bids worth 59 million dollars each for the 182 and 364
days securities and 39 million dollars for the 91-day paper.
All the securities were massively oversubscribed enabling the
government to borrow more than it had sought. For the 91-day
paper, the government received bids worth over 63 million
dollars and accepted 54 million dollars.
Similarly, for the 182 and 364 days securities, the
government received bids worth over 100 million dollars from
each and accepted 50 million dollars for the former and 73
million dollars for the latter.
Analysts noted that the domestic debt is likely to swell even
more as yields fall on both the short and long-term papers,
offering the government cheaper credit.
Rates for the short-term papers stand at between 7 and 11
percent, from a high of between 8 and 13 percent three week ago.
"There is cheaper credit in the domestic for the
"The falling rates and increased appetite for the loans from
banks have offered the perfect conditions for government to
"The domestic debt will, therefore, continue to rise," said
Henry Wandera, an economics lecturer in Nairobi.
Overall, Kenya’s public debt stands at 39 billion dollars,
having surged significantly due to intensified borrowing from
external sources for infrastructure projects.