MONEY MARKET ANALYSIS
Interbank lending experienced a notable increase during the week, with average traded volumes more than tripling to KES 23.31bn from KES 6.99bn the previous week. This was accompanied by a 41.7% jump in the number of transactions. The movement aligns with recent trends, where interbank activity has been alternating between weeks of expansion and contraction.
Meanwhile, the average interbank rate rose marginally to 9.91%, from 9.86%, bucking the recent downward trend. After six weeks of inactivity, the discount window reopened, with KES 3.50bn traded. The table below summarizes the market liquidity indicators:
In the Open Market Operations, the Central Bank of Kenya continued to mop up liquidity to maintain the interbank lending rate within the set corridor.
As has been the trend, interbank rates remain firmly anchored to the Central Bank Rate, with the highs consistently aligned with the upper end and the lows now squarely within the discount window. See the chart below;
