Average interest on short-term interest rates continues to fall piling pressure on banks to lower cost of borrowing.
Yield on government papers fell for the third straight week as it continued to cut appetite for domestic borrowing, which pushed the rates to record highs on October 22.

The weighted average yield on the 91-day Treasury bills fell to 9.58 per cent at auction from 9.65 per cent two weeks ago, the Central Bank said on Friday.
The bank offered bills worth Kshs.6 billion at Thursday’s auction and received bids worth Kshs.4.69 billion.  It accepted bids worth Kshs.4.67 billion.
The average interest on the 182 day Treasury bill fell to 10.2 per cent at Wednesday’s auction – its lowest since April 30.
This was 2.08 percentage points lower than last week’s 12.28 per cent and 12.1 per cent and 12.1 percentage points lower from its peak of 22.3 per cent on October 22.
The yield on one year – T-bill, on the other hand, dropped to 12.09 per cent.  That was its lowest since July 16 at 12.5 per cent and 1.53 percentage points lower than last week’s 13.62 per cent.
The signing of a Kshs.61.20 billion international syndicated loan on October 29 has helped push down the T-bill rates, while improved liquidity has lowered the interbank rate to an average of 9.8 per cent last week.
“The CBK is closely monitoring the sector and continues to address and support financial stability,” Governor Dr. Patrick Njoroge said on Tuesday last week.
KCB on Thursday last week joined Equity, Barclays and Standard Chartered in withdrawing the notice to increase interest rates.
It was this month charging 25 per cent from 18 per cent in September for unsecured loans, Equity 24 from 20 per cent, Co-operative 23 from 18 per cent, Barclays 23.9 from 19 per cent, while Standard Chartered’s was 21.5 from 18 per cent.
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