CBK Weekly Bulletin

August 24, 2012

Highlights

The money market was relatively liquid during the week ending August 22, 2012. The Central Bank sterilized the excess liquidity in the money market by mopping Ksh 15.5 billion through repo securities and Ksh 7.9 billion through term auction deposits against repo maturities of Ksh 20.0 billion and term auction deposits maturities of Ksh 2.1 billion

The average interbank rate decreased to 8.11 percent during the week ending August 22, 2012 compared with 8.90 percent in the previous week reflecting increase of liquidity in the money market.

The Kenya Shilling exchange rate depicted mixed performance against major international currencies in the week ending August 23, 2012. Against the US dollar the Kenya Shilling depreciated marginally to trade at an average of Ksh 84.01 per USD compared with Ksh 83.98 per USD in the week ending August 16, 2012.

The usable official foreign exchange reserves held by Central Bank increased from USD 5,080 million (equivalent to 4.16 months of import cover) as at August 16, 2012 to USD 5,103 million (equivalent to 4.17 months of import cover) in the week ending August 23, 2012.

The Government offered for sale Treasury bills and bonds worth Ksh 18.0 billion during the week ending August 24, 2012. A total of Ksh 25.1 billion was accepted out of Ksh 45.0 billion bids received.

Gross Government domestic debt increased by Ksh 20.8 billion to stand at Ksh 879.6 billion on August 17, 2012, from Ksh 858.8 billion at the end of June 2012. During the week under review, gross government domestic debt increased by Ksh 2.4 billion, on account of Treasury bills.

Stock market performance was strong in the week ending August 23, 2012 as reflected by gains in most of the market indicators. The two key indices; NSE 20 Share Index and NASI were on the upward trend closing at 3,817.70 points and 84.01 points, respectively.

Market capitalization and equity turnover increased by 0.5 percent and 16.4 percent, respectively. The supply of equities declined by 14.2 percent which may be attributed to their being a public holiday on 20th August 2012.

The bonds market recorded a 73.5 percent increase in turnover during the week.

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