12 March 2018

Tanzania's T-Bills Sell Out As Interest Rises

Tanzania has seen higher appetite for government securities, with the Treasury bills auction held last week recording oversubscription.

The Bank of Tanzania had offered Tsh170 billion ($75.173 million) in T-bills, comprising Tsh169 billion ($74.731 million) on the competitive window and Tsh1 billion ($440,000) as non-competitive.

The 35-day paper received bids worth Tsh1 billion ($440,000); the 91-day paper received bids worth Tsh10.35 billion ($4.58 million) while the 182-day paper attracted Tsh98.75 billion ($43.67 million).

The Treasury only accepted Tsh3 billion ($1.32 million) from the 91-day bids, and Tsh65 billion ($28.743 million) from the 182-day offer.

According to the Bank of Tanzania, bids worth of Tsh265.28 billion ($117.31 million) were received on the competitive window, representing an oversubscription of Tsh96.28 billion ($42.58 million).

BoT accepted bids worth Tsh169 billion ($74.731 million) in face value, and Tsh1,612.37 billion ($713 million) on the competitive window.

The auction was dominated by commercial banks, which accounted for 92.71 per cent of the total bids, followed by insurance companies with 4.68 per cent, pension funds with 1.12 per cent and other investors with 1.49 per cent.

The overall weighted average yield declined by 35 bps, reaching 4.84 per cent. The average price for the issue was 0.4859 per cent, with the lowest accepted price being 0.4149 per cent.

Market analysts at the central bank said that they expect demand to remain high for the shorter-term paper.


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