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
- Resident or non-resident individuals and/or corporate bodies who hold an account with a local commercial bank.
- 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.
- Resident or non-resident individual and/or corporate bodies that has CDS Account with Central Bank of Kenya.
- Must have minimum face value of Ksh.100,000. Any additional amounts MUST be in multiples of Ksh.50,000.
- 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
- 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.
- After considering all bids received, competitive and non-competitive, AMC arrives at a cut-off rate.
- 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.
- Note that the Central Bank reserves the right to allocate equal or lower amount of Treasury Bills applied for by an investor.