MONEY MARKET ANALYSIS
This week, the average lending rate eased to 11.80% from 11.91%, with the final day of the week driving the momentum, spurred by the downward adjustment of the benchmark rate. Meanwhile, interbank activity painted a picture of enhanced liquidity, as average volumes soared by 89.1% to KES 43.16bn from KES 22.83bn, mirroring a 40.5% surge in transaction count. The financial pulse quickened, signaling a responsive market environment.
The table below summarizes the market liquidity indicators:
Open market operations slowed this week, with bank bids falling to KES 46.90bn from KES 68.40bn the previous week. The Central Bank accepted bids totaling KES 30.0bn, which helped offset maturities amounting to KES 51.23bn, resulting in an overall liquidity mop of KES 21.23bn.
Notably, the weighted average interbank rate has closely aligned with the Central Bank Rate in recent weeks, with actual highs and lows remaining well within the interest rate corridor, exhibiting no deviations. See the chart below;