Tanzania: Two Years Bond Attracts 160 Billion/-

TWO years bond auctioned by the Bank of Tanzania (BoT) last Wednesday received high investors' attention after attracting bids worth 163.5bn/-.

The auction summary shows that despite the oversubscription, the bank retained 84.2bn/- as successful amount.

The government uses the debt instrument for raising funds for implementing long term projects investment like road and railway infrastructure development.

Investors continue to invest substantial amount in investing in the risk-free debt instrument, the situation continues to impact on the growth of credit to the private sector. Investors in debt instrument are commercial banks, pension funds and some micro finance institutions.

The weighted average yield to maturity declined to 8.5 per cent from 9.2 per cent of the previous session held in February this year.

Despite the fall in yield rate, investors' appetite for the government note has remained strong.

The weighted average coupon yield declined to 7.9 per cent from 8.01 per cent and 12.73 per cent of the preceding session.

Weighted average price for successful bids was 98.68 compared to 97.51 whereas the minimum successful price/100 was 97.95.

The lowest and highest bids /100 were 100.40 and 86.00 respectively.

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