Tanzania: Treasury bills oversubscribed as liquidity squeeze eases

Moderate liquidity tightness in the market made the treasury bills to start the year on a right footing to register over subscriptions.

The outstanding performance of the of the short term maturities indicates the end of the year-end hangover that affected the participation of most investors.

NMB Bank e-market report shows that moderate liquidity tightness is felt following year end local payments, with shortterm interest rates remaining slightly above the 10 per cent mark.

According to the Bank of Tanzania (BoT), auction, the treasury bills auction attracted bids worth 202.59bn/- above 133bn/- sought by the government.

At the end a total of 201.57bn/- was retained as the successful amount. Yield rates for the 364 and 182 days offer increased to 18.81 per cent and 17.67 per cent from 18.66 per cent and 17.38 per cent respectively of the previous session held on the 30th December last year.

The 364 days offer attracted bids worth 150.15bn/- compared to 75bn/- offered to the market for bidding. For the 182 days tenure, a total of 50bn/- was offered to the market and at the end it attracted bids worth 51.42bn/-.

For the 91 days offer, 520.47m/- was tendered from 7bn/- put to the market for tendering while the 35 days offer attracted bids worth 500m/- out of 1bn/- put for tendering.

The highest and lowest bid/100 for the 364 and 182 days offers were 84.85/ 83.01 and 92.50/ 91.55 respectively while for the 91 and 35 days tenor had 97.69/ 96.16.

The weighed average price for successful bid for the 364 tenure was 84.20 while the 182 days offer was 91.90. The weighted average yield per annum for the 364 days was 18.81 while the 182 days was 17.67.

Investors in the one year treasury bills, the first short term instrument to be auctioned in the year 2016 are namely commercial banks, pension funds, insurance companies and some microfinance institutions.
Source: Daily News, reported from Dar es Salaam, Tanzania
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