T-Bills to receive low turnout

BoT HQ in Dar
The Bank of Tanzania is in the market with bills offer on Wednesday but the auction might see a low turnout as it coincides with the first quarter tax obligation.

“We expect the issues to see low turnout due to the timing as the first quarter tax outflows will coincide with the auction,” Standard Chartered bank said.

The amount on sale is 100bn/- split across buckets and amount in brackets as follows: 35Days (5bn/-), 91Days (30bn/-), 182Days (30bn/-) and 364Days (35bn/-).

Meanwhile, the cash market reported very low amount traded 7.15bn/- with overnight rate easing to 17 per cent from the previous close at 20 per cent levels.

“We expect the month end tax obligations to see an increased activity on the interbank with big banks expected to receive favorable prices compared to the small banks,” the bank said.

The fortnight ago auction was undersubscribed by 5.6 per cent. BoT had offered 100bn/- for sale and investors tendered a total of 94.4bn/- only. The central bank accepted 84.5bn/- from 57 out of 66 bids. The most affected maturity was that of 35 days which contained 5bn/-on for auction, as no single bid appeared for the category.

In the last auction of February 29th this year, the central bank accepted 116.6bn/- while it had offered 100bn/- for sale. The BoT accepted more than it offered as the cost of borrowing for government securities are in a downward trend.
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