Central Bank of Kenya - Treasury Securities

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Treasury securities are debt financing instruments issued by the Government of Kenya through the Central Bank of Kenya as envisaged in section 4(A) (1) of the CBK Act Cap 491, which is: The Bank shall act as advisor to and as fiscal agent of the Government of Kenya.

Further, pursuant to the Internal Loans Act (CAP 420), the Central Bank of Kenya has been appointed as an Agent of the Government with respect to issuance of government securities, maintenance of the domestic debt register, and redemption and payment of interest on the securities. Currently, Central Bank of Kenya issues two types of treasury securities:

Treasury bills and Treasury Bonds.

Treasury bills are short-term Government securities while Treasury Bonds are medium to long term Government Securities both sold by the Central Bank of Kenya on behalf of Treasury. The Debt Market is a financial market where Participants buy and sell debt securities. It is composed of government and corporate bonds, all of which, currently trade at the Nairobi Stock Exchange.

The monthly average interest rates for both 91 and 182 days declined in June compared to May 2009 as indicated in the graph above. This is attributed to increased interest from the investing public place their money in Government securities which are considered safer in the current economic environment.