NAIROBI, Kenya, Dec 8 – The Central Bank of Kenya (CBK) has reduced the threshold for investing in Treasury Bills from the current Sh1 million to Sh100,000 beginning January next year.,
The CBK Director of Monetary Operations Jackson Kitili said on Monday that this move would particularly encourage small investors to look for alternative investment opportunities in the domestic market.
“The Central Bank is pleased to announce that in order to provide an alternative avenue for small and large investors, the threshold (for the securities) has been reduced,” Mr Kitili said in a statement sent to newsrooms.
He advised that in order to put their money in the securities, investors would be required to open Central Depository for Securities (CDS) account with the Central Bank.
“Please visit the CBK website at www.centralbank.go.ke for requirements on opening the account or call 2860000 ext 3060 or 3634 for further clarification or enquires,” he advised.
Treasury Bills (T-Bills) are paperless securities and no physical certificates are issued. Investors receive a statement showing that their holdings have been registered on the Central Depository Registry with the National Debt office of the CBK, according to details available on the bank’s website.
Currently, T-Bills are not traded at the Nairobi Stock Exchange and so investors with existing Bills are only able to use them as collateral against borrowings before the maturity date of 91 days or 182 days.
The government has in the past been criticised for placing the minimum value of the securities at Sh1 million and a ceiling of Sh10 million per investor as this locks out small traders.
The move comes a week after the CBK reduced the Central Bank Rate, from 9.0 percent to 8.5 percent and also cut the Cash Reserve Ratio (CRR) from six percent to five percent in order to enhance market liquidity.
It also comes at a time when the government is hard pressed to explain where it will get additional funding to finance its expenditure.
Analysts predict that the CRR cut should release at least Sh10 billion into the economy although this is still short of the total amount of additional borrowing that is likely to have been planned by the authorities.
The move to encourage more investors to purchase the securities is widely expected to stabilise interest rates that the government has been fighting so hard to contain.