Investors snub T-bills

Liquidity tightening in the local market and month end obligations contributed to undersubscription of the treasury bills maturities auctioned on Wednesday.

The auction results posted by the Bank of Tanzania (BoT) showed only 101.48bn/- was tendered against the 135bn/- financial instrument on offer, a 33.5bn/- undersubscription. 

The situation explains tightening of liquidity in circulation as well as the month end tax obligations for most of the investors in the money markets.

According to the Standard Chartered Bank Daily Commentary, the auction was significantly undersubscribed with the 35 days bucket receiving no bids while the 91 days receiving 1.7bn/- against 35bn/- offered.

“The central Bank took all the bids in that bucket and overall, 93.8bn/- was taken against 101.478bn/- bids,” remarked the Standard Chartered Bank. 

Similarly, the yield rate curve moved significantly up with 16, 76 and 42 basis points in 91, 182 and 364 days offer, respectively.

Similarly, yield rates changed slightly across all tenors. The average interest rates increased to 14.02 per cent compared to 13.19 per cent of the previous session. 

The yield rates for the 364 days offer increased to 14.07 per cent from 13.64 per cent of the preceding auction.

Apart from the falling rates, the total amount tendered oversubscribed to 93.12bn/- against 50bn/- offered in the market for bidding. 

There was a slight increase of interest rates in the 182 days tenor to 13.99 per cent compared to 13.23 per cent of the previous session, the total amount tendered was undersubscribed to 6.66bn/- against 45bn/- on offer.

Also a total of 1.7bn/-was tendered in the 91 days offer compared to 40bn/- placed in the market for bidding. Interest rates increased to 11.67 per cent from 11.51 per cent offered in the previous session.
Source: The Daily News,, reported from Dar es Salaam
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