MONEY MARKET ANALYSIS
Interbank lending extended its losing streak for the fourth straight week, with average traded volumes tumbling 32.6% to KES 5.05bn from KES 7.49bn. This was mirrored by a 41.2% drop in transaction count, pointing to a broad slowdown in market activity. Meanwhile, the average interbank rate held steady, inching up slightly to 9.87% from 9.85%, a sign of continued policy calibration by the CBK via open market operations. The table below summarizes the market liquidity indicators:
As May winds down, the market is closing on a muted note, with average interbank lending running below this year’s historical norms. The subdued peer-to-peer activity signals cautious liquidity management, as players appear to be holding onto cash—possibly positioning for more attractive opportunities. See the chart below:
Interbank rates remain firmly anchored to the Central Bank Rate, with the highs slightly above the policy rate and the lows closer to the rate but squarely within the corridor. See the chart below;
