MONEY MARKET ANALYSIS
Interbank lending improved with the average traded volumes rising 22.2% to KES 7.90bn, up from KES 6.47bn, despite a 7.1% drop in transaction count over the week. Meanwhile, the average interbank rate remained stable, at 9.81%, reflecting the continued calibration of liquidity through sustained open market operations by the Central Bank. The table below summarizes the market liquidity indicators:
The interbank market appears relatively stable and slow compared to recent historical levels. As interest rates gradually fall, market players are increasingly holding back in anticipation of more attractive opportunities. See the chart below:
There was a notable downward push in interbank rates, with the lows slipping below the soft end of the prevailing range towards the end of the week. This could be in anticipation of a rate cut in June’s MPC meeting. See the chart below;
