MONEY MARKET ANALYSIS
This week, the average lending rate slightly nudged upwards to 11.91% from 11.87%, underscoring stable conditions. On the flip side, interbank volumes dropped to KES 22.83bn from KES 28.31bn, in tandem with a 5.13% decline in transaction count.
The table below summarizes the market liquidity indicators:
Open market operations intensified this week, with banks significantly increasing their bids to KES 68.40bn, marking a robust 78.2% rise from last week’s KES 38.38bn. Consequently, the operations resulted in a net liquidity injection of KES 17.12bn, while KES 34.03bn exited the interbank market to settle previous issuances.
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;
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