Tanzania: T.bills oversubscribed as liquidity squeeze eases

The easing liquidity squeeze in the market has seen short term government notes starting to pick up and register more subscriptions compared to the previous period.

Poor performance of the short and long term government securities since June this year has been attributed to dry liquidity market that haunted most investors.

During this period, key investors on the treasury bills and bonds were fulfilling tax obligations, thus reducing the amount planned for investments.

Commercial banks are the leading investors in the short- term government paper. Others are pension funds, insurance firms and few microfinance institutions.

In the treasury bills auctioned by the Bank of Tanzania (BoT) in Dar es Salaam yesterday received bids were worth 165bn/- against 135bn/-.

It shows further improvements compared to only 8.57bn/- fetched in the previous auction. The weighted average yield to maturity across all tenures increased significantly compared to the previous treasury bills auction conducted two weeks ago.

The BoT summary shows further that a total of 80bn/- was sold in 364 days period, 622bn/- for 182 days, 18bn/- for 91 days tenure and 5bn/- for 35 days offer.

With the exception of 364-day bid that registered oversubscription while the remaining offers were undersubscribed, the weak performance was reported in the previous session.

The 364 days attracted bids worth 88.22bn/- but at the end only 53.77bn/- emerged as successful amount; for the 182-tenor, a total of 26.40bn/- was total amount tendered and 16.29bn/-was retained as successful bids.

For the 91-day attracted bids worth 10.93bn/- at the end only 930m/- emerged as successful amount while the 35 days offer attracted bids worth 1.5bn/- and was retained as successful bids.

The weighted average interest rates on the 364 days increased to 14.66 per cent compared to 13.61 per cent of the preceding session.

On 182 days, interest rate rose to 13.85 per cent from 12.69 per cent while the 91 days offer, it changed slightly to 8.19 per cent from 7.82 per cent.
Source: Daily News, reported from Dar es Salaam, Tanzania
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