Yields on Kenya’s Euro Bonds rose to a 2 year high following concerns of an alleged dollar shortage in commercial banks.
According to CBK, yields on Kenya’s Euro bond rose to 9.1% with an average of 27.24 basis points in the week ending April 22nd, with a possibility if it rising higher this week.
What does this all mean for the economy? CBK analysts say that the geo political environment like the Ukraine/Russia conflict, rising oil prices and the interest rates in the west are all considerations for investors to start looking at safe haven areas such as U.S.
One of CBK’s researchers says “What that means is the yields on Kenya’s Euro bonds and most African Euro bonds will definitely rise because investors will demonstrate more yield, to compensate them for that lack of opportunity of going to the west.”
Analysts say that there is massive capital flight from emerging markets and from frontier markets like Kenya going back to US and safe haven currencies.