An Empirical Study of the Impact of Treasury Bills Rate Volatility on Corporate Investments: the Case of Commercial Banks in Kenya

Abstract

This project is aimed at documenting the impact of the treasury bills rate volatility on corporate investments where commercial banks have been taken as a case study. The main objective of this study was to highlight the effects of 91-days treasury bills rate movements on commercial banks investments. In order to bridge the existing knowledge gap, a simple regression model was employed on the data and the results points out that there is a significant negative relationship between treasury bills rate and other investments. While the relationship between T-bills rate and T-bills was found to be significantly positive. It is now the duty of the government authorities to reduce T-bills rate so as to stimulate investment in other portfolios. Unless the domestic debt is retired to manageable and reasonable levels, investment of resources in other ventures is not forthcoming, which is detrimental to economic progress of the nation