NAIROBI
The Central Bank of Kenya has partnered with Clearstream, Deutsche Börse Group’s post-trade services provider, allowing international institutional investors to access Kenyan government securities without opening local custody accounts.
The link, announced on June 25, connects Clearstream to the CBK’s Government Central Securities Depository (DhowCSD) through an omnibus account structure, allowing institutional investors using Clearstream to buy, settle and hold Kenyan Treasury bills, Treasury bonds and infrastructure bonds without opening custody accounts in Kenya.
The connection is scheduled to go live on June 29.
The arrangement makes Kenya the 60th domestic market in Clearstream’s global network and only the second African market, after South Africa, to establish such a link.
Standard Chartered Kenya will act as Clearstream’s cash correspondent for Kenyan shilling transactions and as its local custodian with the central bank.
CBK Director of Financial Markets David Luusa said the link is expected to deepen liquidity, expand the investor base and strengthen the domestic government debt market.
“This development underscores our commitment to strengthening and modernizing financial market infrastructure, fostering greater integration with the global financial system, and advancing Kenya’s position as one of the leading financial centers in Africa,” Luusa said.
The new access allows foreign institutional investors to settle and hold Kenyan government securities, use them as collateral and conduct foreign exchange transactions in the Kenyan shilling through Clearstream’s network, without establishing separate local custody arrangements.
Kenya has about 7 trillion shillings ($54 billion) of outstanding Treasury bills and bonds. Non-resident investors held about 4.2% of that stock, or nearly 300 billion shillings, as of mid-June, according to the CBK.
Greater access through Clearstream could help increase foreign participation in Kenya’s domestic debt market, broadening the government’s funding base as it seeks to finance infrastructure and other public spending.
“The new link to Kenya is an important milestone,” said Jan Willems, head of Global Markets at Clearstream, adding that the connection supports the company’s strategy of expanding investor access to emerging markets.
The initiative builds on the CBK’s rollout of the DhowCSD platform in 2023, which digitized access to government securities for retail and institutional investors.
