By Bedah Mengo NAIROBI (Xinhua) --
Kenya’s domestic debt has risen to 21 billion
U.S. dollars following increased sale and uptake of Treasury
bills and bonds as the government seeks to offset a budget
Central Bank of
Kenya (CBK) data indicated on Tuesday that the debt hit the new
level at the end of June, from 20 billion dollars at the end of
May, a rise of nearly about 1 billion dollars in nearly a month.
About 20 billion
dollars of the debt is held in Treasury bonds and bills, which
account for 99 percent of the total borrowing.
Of the two, however,
Treasury bonds account for the largest chunk at 64 percent with
Treasury bills standing at 35 percent.
Following the surge
in borrowing, the share of domestic debt to total public debt,
which stands at 40 billion dollars, is 51 percent.
Each week, the
Central Bank puts up for sale T-bills worth 233 million dollars
but ends up accepting up to 300 million of investors’ bids,
pushing up domestic debt.
Treasury attributed further the increase in domestic debt to a
rise in Treasury bonds holdings as investors’ appetite shift
towards the relatively longer dated securities following a more
normalized yield curve.
The government is
currently ahead of its domestic borrowing target for the current
fiscal year, having borrowed some 97 million dollars against a
target of 60 million dollars, according to Cytonn, a
Nairobi-based investment firm.
The firm added that
domestic debt is expected to sustain an upward trend in the
coming months following reduced credit to private sector by
credit in the East African nation declined to 17-month low of
4.1 percent in the first quarter of 2017 from 21 percent in
2015, with the drop blamed on introduction of interest rate caps
on commercial banks loans.