Tax obligation pushes up overnight rates

The end quarter tax obligation has pushed up overnight rate to two month high as banks turn to wholesale market for funding.

Standard Chartered Bank said the overnight rates increased to 19.50 per cent with some banks seen picking shillings as high as 24 per cent.

The bank said in Daily Market report “quarter end tax outflows saw the interbank drying out with almost all banks turning into the wholesale market for funding.

“We expect the interbank market to start regaining after the quarter end obligations are over with expectations government operations will inject liquidity back into the market”.

Meanwhile, the Bank of Tanzania is offering the seven-year 10.08 per cent coupon bond to take place this Wednesday. The amount on offer is 25bn/-.
Source: Standard Chartered Bank—Daily Market Report
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