Treasury bills undersubscribed

Despite an increase of the yield rates, the one year treasury bills auctioned on Wednesday last week was received with a low note to record under subscription by 25.96 per cent.

The auction results posted by the Bank of Tanzania (BoT) revealed an increment of interest rates across all tenures with the exception of the 35 days offer that received no bidding.

The weighted average yield rates made a slight increase to 14.46 per cent compared to 14.18 per cent of the previous session, an indication of the tight liquidity in the circulation.

The interest rates for the 364 days tenure increased to 15.14 per cent compared to 14.9 per cent of the preceding market, but was not enough hook investors ending up with only 52.1bn/- against 55bn/- offered.

Similarly, the rate of return for the 182 days offer rose to 14.61 per cent compared to 14.56 per cent of the previous session but failed to entice enough investments thus managing to garner only 35.18bn/- against 45bn/- put on offer.

The yield rate for the 91 days offer declined slightly to 12.44 per cent from 12.6 per cent of the past session, the situation that made investors to inject only 20.06bn/- against 40bn/- offered to the market.

Treasury bills and bonds are among the instruments that the government uses to borrow money from the public. 

Over 60 per cent of the key players of long term maturities are commercial banks, with retail investors sharing only five per cent of the business. Other investors are pension funds, insurance companies and few micro-finance institutions.
Source: Daily News, reported from Dar es Salaam, Tanzania
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