Central Bank of Kenya - Other Questions

Treasury Securities and Debt Markets CDS Accounts Application Forms Treasury Bills Treasury Bonds Infrastructure Bonds Kenyans Abroad Yield Curve Horizontal Repo Market Secondary Trading Other Questions

OTHER QUESTIONS

I have a CDS Account with a Stock Broker; can I Use it to Purchase Treasury Bonds and Bills?
No. To invest in Treasury Bills/Bonds, one must open a CDS account at Central Bank of Kenya. The Central Depository for Securities Account (CDS) at the Central Bank differs from the one operated with the stock brokers.

If I Buy a Treasury Bill or Bond, Can I Access my Funds before Maturity Date?
Yes. One can exit Treasury Bonds through trading at the Nairobi Stock Exchange, may be transferred to other parties through licensed stock brokers or may be rediscounted at the Central Bank. Treasury Bills on the other hand may either be transferred or rediscounted at Central Bank or in the case of the 364-days Treasury bills, traded Over The Counter.

How Do I Bid a Competitive Interest Rate in Treasury Bill/Bond Successfully?
It is difficult to tell exactly what interest rate one will get in any given auction when bidding. However, by closely monitoring trends in interest rates, prevailing market conditions and any other events in the market, and advice from market watchers, one may be lucky with the market outcome.

Proceeds from Issuance of Government Securities are Used For?
Proceeds are used to finance budget requirement in the form budget deficit/shortfall. Borrowing target is usually set at the beginning of the financial year in the Minister’s budget speech.

Who Can Open a CDS Account and are there Any Charges?
Individuals, companies or registered societies Investors are free to open Central Depository for Government Securities Account (CDS) at CBK. Foreign citizens can invest in Treasury bills/bonds through nominee accounts with investment banks or commercial banks. There are no charges for opening and maintaining a CDS account but one must operate a Commercial bank account.

What is the Difference between Treasury Bond and Corporate Bond?
Treasury bonds are issued by the central government to raise funds for financing budget deficits while corporate bonds are issued by corporate entities to finance capital projects and enhance their balance sheets.