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How to know amounts to pay Central Bank after successfully applying to invest in Treasury bills

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  • 11 months ago
  • Posted: October 21, 2016 at 4:16 pm

A treasury bill is a short-term borrowing instrument issued by the Government through the Central bank of Kenya (the fiscal agent) to raise money on short term basis – for a period of up to one year. Treasury bills are issued in maturities of 91, 182 and 364 days. Note that treasury bills are sold at a discounted price to reflect investor’s return and redeemed at face (par) value.

Parties that can invest in Treasury bills in Kenya

  1. Resident or non-resident individuals and/or corporate bodies who hold an account with a local commercial bank.
  2. Resident or non-resident individuals and/or corporate bodies who may not have an account with a local commercial bank but invests as a nominee of a commercial bank or investment bank in Kenya.
  3. Resident or non-resident individual and/or corporate bodies that has CDS Account with Central Bank of Kenya.
  4. Must have minimum face value of Ksh.100,000. Any additional amounts MUST be in multiples of Ksh.50,000.
  5. Note that a non-Kenyan investor who is NOT domiciled in Kenya can invest in Kenyan Government Treasury bills as a NOMINEE of a local commercial bank or investment bank. Non-Kenyan investors domiciled in Kenya can however invest directly by opening a CDS account at Central Bank of Kenya (CBK).

When to know amounts to pay Central Bank after application

  1. The Auction Management Committee (AMC) meets every Thursday at 4.00pm to conduct the auction of the 91-days T-bill and on Wednesday for the 182- and 364-days papers T-bills.
  2. After considering all bids received, competitive and non-competitive, AMC arrives at a cut-off rate.
  3. The successful weighted average rate derived from competitive bids is applied to all non-competitive bids (average) and is published with the results in the Daily newspaper.
  4. Note that the Central Bank reserves the right to allocate equal or lower amount of Treasury Bills applied for by an investor.
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Mr. Felix
A Math Nerd and a Computer Geek. Currently a Windows 10 Insider. Interested in AI, big data and AR/VR. Takes a keen interest in developments in the tech, business and social media spheres.
Article Categories:
BANKING · KENYA