*Today’s News Highlights* ▪ *Rush for T-bills to lock gains before base rate cut hits* Investors in Treasury bills set off a new rush for the securities in the latest auction as they sought to lock in gains before rates fell further following last week’s 0.5 percentage point cut in the Central Bank of Kenya (CBK) base rate. Bids in the sale came in at Sh71.18 billion, the highest subscription rate in 11 weeks. The CBK took up Sh59.4 billion, having had the luxury of leaving bids it considered expensive on the table. As a result, interest rates across all three tenors of T-bills fell by their sharpest margin in three months ▪ *Pension payouts up 40pc as Treasury races to cut backlog* Payouts to retired public sector workers jumped 40.39 percent in the first half of the current financial year, as the Treasury raced to reduce backlog from the previous fiscal year. Latest official numbers showed the Pension Department at the Treasury processed Sh82.84 billion in pension claims in the six-month period to last December, compared to Sh59.01 billion in the same period last year. The government has been struggling to disburse pension funds due to shortfalls in revenue collections, deepening the economic hardships for retirees, some of whom die without reaping the benefits of years of service to the public. The Treasury, for instance, carried over Sh23.78 billion in pension claims, which were due last financial year ended June 2024, to the current year, citing a shortfall in revenue. ▪ *CBK orders 24 banks to table capital boost plans* The Central Bank of Kenya (CBK) has written to the 24 banks whose core capital falls below Sh10 billion asking for details on how they intend to raise new funds to satisfy the recently enhanced minimum capital adequacy level. The Business Laws (Amendment) Act, 2024, which was signed into law last December, requires banks to increase their minimum core capital from Sh1 billion to Sh10 billion over the next five years. The top-up starts with an increase to Sh3 billion by the end of 2025, progressing to Sh5 billion by 2026, Sh7 billion by 2027, Sh8 billion by 2028 and finally Sh10 billion by 2029. ▪ *CBK projects Sh187bn reserves boost from new IMF funding* The Central Bank of Kenya (CBK) projects its usable foreign currency reserves to rise by Sh187.4 billion ($1.45 billion) this year, boosted by inflows from the International Monetary Fund (IMF), enhancing the country’s resilience to economic shocks.The CBK holds foreign exchange reserves as a safeguard ensuring the availability of foreign currency to meet the country’s external obligations including imports and external debt service. It says its official reserves already stand at their highest level on record in nominal terms having closed 2024 at Sh2.1 trillion ($9.3 billion). The IMF is expected to disburse its last instalment of financing from a multi-year programme with Kenya by June 2025, providing additional foreign exchange to fund the reserves. ▪ *Airtel to open paybills, tills to M-Pesa users by March* Airtel Money cash tills and paybills will be open for transactions by users on the rival M-Pesa platform from March, a top official said, closing a gap that has existed since 2022 when the former’s subscribers were allowed to pay to the corresponding Safaricom payment platforms.Airtel Money Managing Director Anne Kinuthia-Otieno said plans are in top gear to implement the payments inter-operability within the current quarter. Once Airtel’s plan comes to life, it will mark the close of the second part of a three-phased CBK-led national payments blueprint touching on telco operators. _Courtesy: Business Daily_ https://whatsapp.com/channel/0029VaBcBIRAzNbtD1l1eA1k