Treasury Bills subscription falls short

The Treasury bills auction was undersubscribed by 5.6 per cent on Wednesday following the downward trend of the borrowing cost on the government securities.

In the sale of both January and February this year, investors have been oversubscribing both the treasury bills and treasury bonds and in two auctions the Bank of Tanzania accepted more than the amount it offered for bidding.

However, in Wednesday’s auction, the 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.

The 35 day maturity had the lowest weighted average yield at 5.24 per cent while others also experienced a decline although not less than 11 per cent. This time the weighed average yields showed a u-turn trend as some increased and one remained the same as the last auction.

The 364 day maturity remained at 12.38 per cent while the 91 day increased from 11.74 per cent in the last auction to 12.34 per cent. The 182 day maturity also increased from 12.26 per cent to 12.75 per cent.

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.

In the previous auction, it also accepted 146bn/- while it offered only 100bn/- for sale. Both auctions were oversubscribed.
Source: the Citizen,, reported by Alawi Masare

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