Regulatory Alerts2012-09-03
Banking Circular No 3 of 2012 - Multiple Tenures on Term Auction Deposit (TAD) Facility
The Bank of Kenya announces the introduction of multiple tenures for Term Auction Deposit (TAD) Facility, effective June 6th, 2012. These include 14, 21, and 28-day options, allowing commercial banks flexibility in their investment choices while maintaining a price ceiling of 18% Current and previous TAD terms will remain unchanged. This adjustment reflects the changing liquidity environment in the market. The announcement is made by Gerald A. Nyaoma, Director of Financial Markets Department on May 6th, 2012.
BANKI KUU YA KENYA Haile Selassie Avenue P. O. Box 60000 - 00200 Nairobi, Kenya Telephone: 2860000. Fax: 34019 BANKING CIRCULAR NO. 03 OF 2012 TO: ALL CHIEF EXECUTIVES OF COMMERCIAL BANKS
Multiple Tenures On Term Auction Deposit (Tad) Facility
We write with reference to Banking Circular No. 3 dated April 28, 2008 introducing Term Auction Deposit Facility as an additional instrument for conducting Open Market Operations.
The Central Bank has found it necessary to review this instrument in line with changing .liquidity environment in the market. To this end the Central Bank hereby announces the introduction of multiple tenures of 14, 21 and 28 days for this Facility with effect from 6th June 2012. The price ceiling of the instrument will be the CBR which is currently 18%. The multiple range of tenures will provide flexibility to commercial banks on choice of tenure and also serve as an alternative investment instrument All other operational terms on TAD instrument remain as previously communicated.
GERALD A. NYAOMA DIRECTOR, FINANCIAL MARKETS DEPARTMENT 06 May 2012