
Contents
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17.1 Background 17.1 Background
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17.2 Legal and Regulatory Framework for Government Securities Market 17.2 Legal and Regulatory Framework for Government Securities Market
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17.2.1 Internal Loans Act 17.2.1 Internal Loans Act
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17.2.2 Public Finance Management Act (PFMA) 17.2.2 Public Finance Management Act (PFMA)
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17.2.3 The Central Bank of Kenya Act and Fiscal Agent Role 17.2.3 The Central Bank of Kenya Act and Fiscal Agent Role
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17.3 Institutional Arrangements for Government Securities Market 17.3 Institutional Arrangements for Government Securities Market
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17.3.1 The National Treasury 17.3.1 The National Treasury
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17.3.2 The Capital Markets Authority (CMA) 17.3.2 The Capital Markets Authority (CMA)
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17.3.3 The Central Depository of Securities Corporation (CDSC) 17.3.3 The Central Depository of Securities Corporation (CDSC)
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17.3.4 The Nairobi Securities Exchange (NSE) 17.3.4 The Nairobi Securities Exchange (NSE)
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17.4 Issuance Policy, Strategy and Debt Management Framework 17.4 Issuance Policy, Strategy and Debt Management Framework
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17.4.1 Government Borrowing Strategy (Medium Term Debt Strategy—MTDS) 17.4.1 Government Borrowing Strategy (Medium Term Debt Strategy—MTDS)
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17.4.2 The Public Debt Sustainability Framework (DSF) 17.4.2 The Public Debt Sustainability Framework (DSF)
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17.4.3 Public Debt Reporting 17.4.3 Public Debt Reporting
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17.4.4 Domestic Government Borrowing Process 17.4.4 Domestic Government Borrowing Process
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17.4.5 Domestic Government Borrowing Programme (GBP) 17.4.5 Domestic Government Borrowing Programme (GBP)
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17.5 Developments in the Primary Market for Government Securities 17.5 Developments in the Primary Market for Government Securities
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17.5.1 Government Securities Portfolio by Instrument 17.5.1 Government Securities Portfolio by Instrument
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17.5.2 Holders of Government Securities 17.5.2 Holders of Government Securities
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17.5.3 Government Securities by Maturity 17.5.3 Government Securities by Maturity
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17.5.4 Treasury Bills 17.5.4 Treasury Bills
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17.5.4.1 Treasury Bills by Tenor 17.5.4.1 Treasury Bills by Tenor
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17.5.4.2 Treasury Bill Interest Rates 17.5.4.2 Treasury Bill Interest Rates
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17.5.4.3 Treasury Bill Holders 17.5.4.3 Treasury Bill Holders
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17.5.5 Treasury Bonds 17.5.5 Treasury Bonds
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17.5.5.1 Stock of Treasury Bonds 17.5.5.1 Stock of Treasury Bonds
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17.5.5.2 Holders of Treasury Bonds 17.5.5.2 Holders of Treasury Bonds
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17.5.5.3 Auctions of Treasury Bonds 17.5.5.3 Auctions of Treasury Bonds
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17.6 Developments in the Secondary Market for Government Securities 17.6 Developments in the Secondary Market for Government Securities
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17.6.1 Trading of Government Bonds 17.6.1 Trading of Government Bonds
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17.7 Milestones in the Government Securities Market 17.7 Milestones in the Government Securities Market
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17.7.1 Benchmark Bonds Programme (BBP) 17.7.1 Benchmark Bonds Programme (BBP)
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17.7.2 The Kenya Government Bond Yield Curve 17.7.2 The Kenya Government Bond Yield Curve
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17.7.3 Market Infrastructure: Trading, Clearing Settlement Arrangements 17.7.3 Market Infrastructure: Trading, Clearing Settlement Arrangements
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17.7.4 Rollout of Horizontal (Interbank) REPO 17.7.4 Rollout of Horizontal (Interbank) REPO
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17.7.5 Infrastructure Bonds (IFB) Issuance 17.7.5 Infrastructure Bonds (IFB) Issuance
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17.7.6 Reduced Moratorium Period for Trading New or Reopened Bonds 17.7.6 Reduced Moratorium Period for Trading New or Reopened Bonds
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17.8 Outlook on Development of Government Securities Market 17.8 Outlook on Development of Government Securities Market
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Appendix Appendix
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References References
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17 Development of the Government Securities Market in Kenya
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Published:April 2021
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Abstract
This chapter evaluates developments in the domestic government securities market in Kenya during the period 1966 to 2016, a 50-year period since the Central Bank of Kenya was established. The chapter traces the evolution of Kenya’s government securities market starting with the legal and regulatory framework, evolution of the issuance policy, developments in both the primary and secondary market for government securities over time and some of the milestones achieved during the period under review. Among the key milestones include development of a reliable domestic financing programme for the government, development of benchmark bonds and a government securities yield curve, development of market infrastructure, and diversification of products in the market such as infrastructure bonds. Kenya plans to further deepen her government securities and capital markets, through launch of new products, modernization of trading system and establishment of over-the-counter market for government securities.
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