Bank’s
overnight borrowing rate has gone down dramatically to 14.28 per cent, thanks
for the fall of the repurchase agreement and easing of tight money stance.
The
overnight, the window which banks borrow from each other, went down at the
close of market last Friday from the 24.15 per cent of previous week. Fortnight
ago the rate has climbed to over 30 per cent which was historical high.
Tanzania
Securities Business Analyst Joel Nkya attributed the declining trend to fall of
Repo:
“The
fall of interbank lending rate could be attributed to the fall
of
repo rates which dropped from 13.5 per cent in the previous week to
8.5
per cent this week for 14 days repo agreement,” Mr Nkya said in the weekly market
report.
The
Standard Chartered Bank said the overnight rate continues to drop, now at 14.28
per cent “further affirming the easing liquidity conditions in the market”.
Shilling
strengthening is among the factors that pushed down the overnight rates as for
the second week has been trading at very little volatility against US dollar.
The
shilling closed the market last Friday trading flat against the dollar on the
back of a relatively quiet session of matched inflows and demand in the
interbank market.
The
shilling is trading between 1,580/- and 1,600/- margins a dollar.
Meanwhile,
this Wednesday there is a 25bn/- five-year bond on auction. After poor
performance, and even cancellation of recent 5-year bonds it will be interesting
to see how investors approach the auction.
“It
is believed that rejected bids/auctions were on the back of prices sought by
investors being too low,” Standard Chartered Bank said in a today’s daily
market report.
Source: Tanzania Exchange: tzexchange.blogspot.com
0 comments :
Post a Comment