Kenyans eye the return of the Eurobond market as they anticipate mending the shortage of money, to curb the high-interest rates.
The Eurobond markets are anticipated to cure the cash crunch at the Treasury due to high-interest rates in the domestic market that have left the country reopening several bonds.
Patrick Njoroge the Central Bank Governor said during an interview with CNN that Kenya will be resuming external markets to raise funds as Eurobond rates continue to decline following the end of the election period.
“We shall be going to the international markets soon, I will not say when but soon,” said the central bank of Kenya governor Patrick Njoroge.
Inaccessibility of the Eurobond market is one of the key reasons the Treasury had a balance of just Sh93 million by the end of August this year, raising concerns among Kenyans over the state of finances in the coffers.
Kenya had dropped the plan to issue a $1 billion Eurobond issue in June this year after rates rose above 17 percent and later 22 percent pricing the country of the debt markets.
“Part of the reason the Treasury had a balance of Sh93M is that it was priced out of the Eurobond market,” said Churchill Ogutu, head of research at IC Group.
The Treasury has experienced a sustained shortfall in funding with last week’s auction netting only 46 percent of the expected amount, as investors go for short-term debt, especially on Treasury bills.
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“The Treasury bill auction of September 22, received bids totaling Sh11.2 billion against an advertised amount of Sh24 billion, representing a performance of 46.6 percent,” the CBK said
