Repo rate dips to lowest level

The interbank borrowing rates have dropped to the lowest level since the beginning of this year, thanks to the fall of the repurchase agreement (Repo) rate.

The interbank rates dropped from 7.04 per cent of previous week to trade between 3 and 5 per cent of yesterday.

“Repo rates have continued to fall to around 5.0 per cent for 14 days repo rates a factor that has continued to push down the inter bank borrowing rates,” Tanzania Securities CEO Moremi Marwa said in the weekly commentary issued by his firm.

Repo or sale and repurchase agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date, but the repurchasing rate should be higher.

Standard Chartered Bank said on Tuesday 7 that the interbank cash market has recorded down trend on the overnight and one week rates. The overnight rates weighted average yield decreased to 5.04 per cent and trading between1 per cent and 8 per cent levels.

“Repo market was very active for couple of weeks past as banks tries to deploy excess funds on their books,” the bank said in it Daily Commentary of yesterday. 
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