15 March 2019

Tanzania: 10-Year Treasury Bond Attracts 63.2bn/-

THE 10 years treasury bonds auctioned on Wednesday by the Bank of Tanzania (BoT) attracted bids worth 63.2bn/- compared to the 87bn/- sought to the raised through the instrument.

This is the first 10 years instrument to be auctioned this year by the BoT that ended the session undersubscribed.

Despite the undersubscription of the 10 years Treasury bond, the government retained 46.4bn/- as successful amount. Short term maturities particularly treasury bills has continued to be attractive to investors ending up overly subscribed.

However, most of the treasury bonds received low demand with the exception of 20 years. Commercial banks which are key players in the government securities go for treasury bills than in the treasury bonds because customers deposits are short term.

The other players in the government securities are pension funds, insurance companies, some microfinance institutions and individual investors.

The yield rates increased to 15.10 per cent compared to 14.38 per cent in the session held in December and 15.08 per cent in September last year.

The weighted average coupon rate likewise increased to 14.06 per cent compared to 13.93 per cent in the session held in December and 13.52 in September the previous year.

The funds sourced through the government securities are spent for financing infrastructure projects development like railway, roads, bridges and airports.

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