6 July 2012

Tanzania: Investors Rush for Treasury Bills

THE first Treasury bill auction for government's new fiscal was on Thursday oversubscribed by 81 per cent, signifying easing of liquid scarce in the economy.

The Bank of Tanzania (BoT) sought to raise 100billion/- through the short term instrument, but the market tendered 181.06 billion/- despite dropping yield rates. Standard Chartered Bank, quoting BoT, said at the end of the auction, the central bank accepted 102.75 billion/-, being an increase of the seeking amount by 2.75 billion/-.

The T-bill average yield rate for 35days slid down by almost half from 8.09 per cent to 4.50 per cent, but the amount offered was 12bn/- against 5.0 billion/- on offer. On the other hand, the 91-day bill interest rate also slightly increased from 13.31 to 13.38 per cent but the amount tendered was somewhat below that on offer of 30billion/-. It was undersubscribed by 1.38billion/-. BoT accepted only 16 billion/-.

The 182 and 364-day bills both saw a slightly decrease in yield rates by 0.4 percentage points to 13.41 per cent and 0.63 percentage points to 14.01 per cent, respectively. However, the decrease in interest could not deter investors from bidding for the bills which both were oversubscribed heavily.

The 182-day bill was subscribed at 37.7 billion/- against the 30bn/- on offer while the 364-day was oversubscribed to 102.67 billion/- against 35 billion/- offered. Meanwhile the shilling lost further ground in the morning session of yesterday before recouping the ground in the afternoon session.

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