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Kenya's internal debt drifts to $20bn on intense borrowing

Staff Writer |
Kenya's domestic debt rose by $1.1 billion in two months, gravitating closer to $20 billion as the government intensifies domestic borrowing ahead of the close of the fiscal year.

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Central Bank of Kenya (CBK) data indicated Tuesday that East African nation's domestic debt currently stands at $19.4 billion, a considerable rise since the start of February when it stood at 18.3 billion.

The debt has been accelerated by increased uptake of mainly Treasury bonds in the last two months, which now constitute of 68 percent of the total domestic debt, according to the apex bank.

As at February, the value of domestic debt held in Treasury bonds stood at $11.8 billion rising to 12.8 billion at the end of last week.

The data shows a rapid progression of the debt held in Treasury bonds as CBK continued to float the papers monthly.

Last month, Kenya raised $318 million from two ten-year bonds worth $291 million it floated to cover end of fiscal year deficit.

The bonds were massively oversubscribed, with data from the CBK indicating a high appetite from investors, in particular commercial banks.

And in February and March, Kenya put up for sale Treasury bonds worth 291 million with investors bidding massively for the papers.

After the sale of the bonds, the CBK went back to the debt market in tap sales seeking up to $233 million in the auctions.

Kenya again put up for sale mobile-phone based bonds worth$ 1.5 million which were traded via the gadgets in a first. The securities are currently being traded at the Nairobi Securities Exchange.

However, besides the T-bonds, uptake of Treasury bills has equally increased with the CBK last week accepting $320 million from the 91-day, 182-day and 364-day bills.

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