91-Day T-Bill refers to a short-term debt security issued by the Kenyan government through the Central Bank of Kenya.
These Treasury Bills have a maturity period of 91 days, hence the name, and are used as a tool for the government to raise funds to finance its budget deficit or manage its cash flow.
The T-Bills are considered to be one of the safest investment options available in the market, as they are backed by the full faith and credit of the Kenyan government.
The 91-Day T-Bill is issued through regular auctions conducted by the Central Bank of Kenya, where investors can bid for the T-Bills at a discount to their face value.
The difference between the discounted purchase price and the face value at maturity represents the investors’ return on investment.
The interest rate on the T-Bill is determined through the auction process, where investors submit competitive bids based on their desired yield.
At the end of the 91-day period, investors are paid the face value of the T-Bill.
The interest payments are subject to withholding tax, which is deducted at source by the Central Bank of Kenya.
The returns on the T-Bill are considered to be relatively low compared to other investment options, but they are also less risky.
The 91-Day T-Bill is considerably liquid, as the investors can easily buy and sell their T-Bills in the secondary market before maturity.
This liquidityLiquidity refers to the ease with which assets can be converted into cash without significantly affecting their market price. This concept is crucial ... ... makes the T-Bills an attractive investment option for investors who may need access to their funds before the maturity date.
Also, the T-Bills are exempt from withholding tax for non-residents, making them a popular choice for foreign investors looking to invest in the Kenyan market.