Treasury bills auction yields positive results

BoT HQ in Dar
Twelve months treasury bills auction conducted on Thursday by the Bank of Tanzania (BoT) more than doubled to 229.23bn/- compared to 110bn/- sought to be mobilised.

According to the BoT auction summary, a slight decline of the average yield to 12.4 per cent did not discourage massive investments into the treasury bills maturities to an overly subscription. 

"Yields in the one-year treasury bills tender went down across all the tenors with an exception of the 35-day T-bill. This is an indication that the market is still liquid irrespective of month end obligations," stated the NMB e-markets report.

Commercial banks are the leading investors in the treasury bills maturities with over 60 per cent of the market share. The rest of 40 per cent is shared among pension funds, insurance schemes and retail investors. 

The tender attracted 244 bids but only 109 emerged successful. The highest and lowest bid prices were 89 and 86.89 while the minimum successful price was 88.25.

Despite the oversubscription, the government did not take the amount above 110bn/- placed in the market for tendering. 

The Standard Chartered Bank daily market commentary, the offer size represents a 10 per cent increase in issue amount compared to 100bn/- offered over the last two auctions.

The bank had forecast a well attended issue despite the current high interbank liquidity. 

The 364 days treasury bills became oversubscribed to 92.66bn/- at 13.06 per cent interest rates although the government planned to raise only 40bn/-. Similarly the 182 days tender jumped to 75.55bn/- at 13 per cent rate of return while the government wanted to mobilise only 35bn/-.

The 91 days offer was oversubscribed to 50.52bn/- at 12.18 yields although the government sought to raise only 30bn/-. Total amount tendered for the 35 days offer jumped to 10.50bn/- at 4.24 rate of return although only 5bn/- was planned to be raised.
Source: The Daily News,, reported by Sebastian Mrindoko
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