'Kenya is financially liquid'
NAIROBI - Kenya’s debt market is liquid enough to support higher government and private sector borrowing, analysts said.
NAIROBI - Kenya’s debt market is liquid enough to support higher government and private sector borrowing, analysts said.
The government plans to borrow 109 billion shillings ($1.43b) in the 2009/10 fiscal year to plug a budget deficit.
Besides the government borrowing, a number of firms are in the process of issuing bonds worth more than 20 billion shillings.
They include CFC Stanbic Bank and electricity generator KenGen.
Some analysts are worried the heavy borrowing programme might crowd out investment in the private sector and drive up short-term interest rates.
“The liquidity is there. I don’t think the government is going to do something that deliberately cramps the private sector,†Anne Aliker, director of investment banking for Standard Bank in East Africa said.
“The equities market has taken a bit of a hit this year, but the bond market remains strong ... it is going to remain strong,†she said. “People are looking for the best returns and bonds provide that.â€
Caroline Mugadi, treasurer at Co-operative Bank, said the flagging economy meant banks do not have many new lending avenues.
Reuters
The government plans to borrow 109 billion shillings ($1.43b) in the 2009/10 fiscal year to plug a budget deficit.
Besides the government borrowing, a number of firms are in the process of issuing bonds worth more than 20 billion shillings.
They include CFC Stanbic Bank and electricity generator KenGen.
Some analysts are worried the heavy borrowing programme might crowd out investment in the private sector and drive up short-term interest rates.
“The liquidity is there. I don’t think the government is going to do something that deliberately cramps the private sector,†Anne Aliker, director of investment banking for Standard Bank in East Africa said.
“The equities market has taken a bit of a hit this year, but the bond market remains strong ... it is going to remain strong,†she said. “People are looking for the best returns and bonds provide that.â€
Caroline Mugadi, treasurer at Co-operative Bank, said the flagging economy meant banks do not have many new lending avenues.
Reuters