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| BoT HQ in Dar |
The amount tendered in a 7-year bond
floated by the Bank of Tanzania (BoT) last week more than doubled to
71.01bn/- compared to only 30bn/- sought to be raised, a sign of the
improvement of liquidity situation in the market.
The BoT auction results show that
despite the oversubscription the government accepted 30bn/- that had
been sought to be raised.
For example, the last week debt market
where the BoT wanted to raise 100bn/- through Treasury Bill was
oversubscribed to 269.99bn/- against 100bn/- the central bank wanted to
raise, but accepted 114bn/- only.
In the 7-year tender, only 16 bids out
of 37 received emerged successful, an indication that some investors
tendered below the price offered at the market by the Bank. The minimum
successful 79.18 while the highest and lowest prices per bid were 82.85
and 70.73 respectively.
Although interest rate was 14.85 per
cent lower than the rates offered in the previous seven-year issue that
closed at 15.44 per cent with highest yield accepted at 16.50 per cent,
it did not prevent investors from injecting massive funds.
"The recent bond issue saw a high
turnout in which BoT accepted all bids with marginal impact on yields,"
the bank said.
The National Microfinance Bank (NMB) said money in the
circulation has improved recently as manifested by the fall of interbank
rates descending to below 3 per cent that could have been the reason
for the oversubscription.
The Orbit Securities Head of Operations
and Dealings, Mr Juventus Simon, earlier said bidders were likely to go
for bills as it pays better compared to equities. "This demand might
drive bills yield rates to decline," Mr Simon said.
International Monetary Fund (IMF) said
yesterday that the country's debt sustainability assessment (DSA) has
been updated to reflect new borrowing activities.
Source: The Daily News, http://www.dailynews.co.tz, reported by Sebastian Mrindoko
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