Nairobi, April 22 -- The Central Bank of Kenya (CBK) is still planning to switch two more bonds into longer securities before June, despite investors rejecting the last such sale earlier this month.

CBK Governor Kamau Thugge said that unfriendly market conditions caused by the geopolitical uncertainty around the Iran war were behind the flop of the April 13 switch bond auction, which was the third such issuance since January.

In this April sale, the Treasury offered investors a chance to swap Sh20 billion from a 10-year paper that matures in August into a 15-year bond that comes due in 2033. Investors agreed to swap only Sh1.75 billion, forcing the State to pay them Sh18.2 billion in August.

The 10-year paper has been paying holders 15...