Gov’t to issue Sh30b infrastructure bond in December

Kenya will issue a nine-year infrastructure bond for up to 30 billion shillings in December to fund energy, water and road projects, the central bank said on Friday.

The bond, which will be auctioned on Dec. 9, will be free from payment of any income tax and it will come with a coupon of 11 percent, the bank said. It will be on sale from Dec. 1 to Dec.8.

Meanwhile, the Kenya Central Bank sought to inject 5 billion shillings  into the market on Friday through reverse repurchase agreements (reverse repos).

The bank normally uses reverse repos to offer liquidity to any commercial bank that might be struggling to get funding on the interbank market for overnight lending.

In the money markets, the  shilling was unmoved on Friday as some businesses remained shut after a public holiday to mark the visit of Pope Francis to the East African nation.

At 0715 GMT, commercial banks posted the shilling at 102.15/25, unchanged from Wednesday’s closing rate.

Kenyan financial markets were closed on Thursday. “It is very dull. Most of the corporate customers are still on holiday. We are going to stay range-bound,” said a trader at a commercial bank.

The shilling has been stuck in a narrow band of 102.00-102.50 for weeks as importer dollar demand keeps it from appreciating beyond 102.00 and the prospects of the central bank’s intervention keeping it from falling past 102.50.