MONEY MARKET ANALYSIS
Interbank lending rejuvenated this week, defying last week’s declining trend as traded volumes jumped 85.31% KES 21.85bn from KES 11.79bn. Deal numbers echoed the rise, increasing by 37.0%. On the flip side, the average interbank rate remained relatively stable, inching down marginally to 10.68% from 10.70% the week before. Key to note, the discount window was active following weeks of inactivity though only KES 200m was traded. The table below summarises the market liquidity indicators:
So far, the average traded volumes in the interbank market remains higher than that of March but way below what was traded in January. This suggests a potentially tightened liquidity as banks seemingly hold their liquidity. See below a visual chart of the interbank market trends;
The weighted average interbank rate has closely tracked the Central Bank Rate, underscoring the stability and effectiveness of the monetary policy framework. See the chart below;
