STRONG demand greeted the treasury bills auctioned on Monday closing the session oversubscribed despite end of year obligations that most investors are fulfilling.
The one year government note attracted bids worth 142.08bn/- compared to 141bn/- offered to the market for tendering. However, at the end the government retained 127.32bn/- as successful amount.
Most investors in the short term maturities like commercial banks have recently been facing liquidity squeeze affecting directly their investment decision in the treasury bills.
The outstanding performance of the session held on Monday this week suggest some improvement of liquidity situation of the investors that despite tax obligations and other year end obligations, still managed to make more investment.
Commercial banks are some of the key investors in treasury bills controlling over 60 per cent of the market share. Other investors are pension funds, insurance companies and some microfinance institutions.
Funds collected through the 364 and 182 days instrument used to finance government budget while the 35 and 91 days instrument are used by the Bank of Tanzania (BoT) to mop up excess liquidity in the circulation.
The two instrument, 364 days and 182days tenure attracted bids worth 115.93bn/- and 26.10bn/-, respectively against 104bn/- and 33bn/- offered to the market while 35 days offer attracted bids worth 50m/- against 1bn/- offered.
Yield rates increased slightly to 9.30 per cent for the 364 days offer compared to 9.14 per cent of the session held two weeks ago.
For the 182 days tenure, yield rates increased to 5.27 per cent compared to 5.24 per cent of the preceding session.
Yield rates for the 35 days offer remained the same as 3 per cent as it was in the previous session.
The weighted average price for successful bid was 91.51 for the 364 days offer compared to 91.64 of the previous session.