Treasury bills remain attractive, despite low yields

Despite the falling yield rates, the 12 months treasury bills maturities have continued to be attractive to investors, making the debt instrument to be oversubscribed by 50.92 per cent.

However, with exception of 364-day tenor, the amount tendered for the 35, 91 and 182 days bills became under subscribed. 

The declining annual headline inflation rate that reached 10.4 per cent in February, this year is one of the reasons behind the positive performance of the one year treasury bills maturities.

According to the National Bureau of Statistics (NBS), the decrease of annual headline inflation rate for the month of February explains that the speed of price increase for commodities in the period under review has decreased compared to the pace recorded in the preceding month.

The Bank of Tanzania (BoT) auction results show that the average interest rates dipped to 12.97 per cent compared 13.28 per cent offered in the previous session. 

A total of 135bn/- was offered for bidding, but the market saw the amount tendered jumped to 203.74bn/-, although a sum of 124.19bn/- became successful, an indication that some investors bid below the price offered.

Interest rate for the 364-day tenor dipped to 13.67 per cent from 14.15 per cent of the previous session but didn’t deter buyers from oversubscribing by 131.88bn/- against the only 45bn/- offered in the market. 

Likewise, rate of return for 182- day offer fell to 13.14 per cent compared to 13.57 per cent of the previous market and the total amount tendered declined to 44.28bn/- against 45bn/- offered into the market for tendering.

Also, yield rate for the 91 days offer fell to 11.64 per cent compared to 11.98 per cent of the previous session and the total amount became under subscribed to 25.57bn/- against 40bn/- offered in the market. 

For the 35 days tenor, only 2bn/- was the total amount against 5bn/- offered for tendering at 6.55 per cent yield rate compared to 6.75 per cent of the previous market.
Source: The Daily News,,reported from Dar es Salaam
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