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| BoT HQ in Dar |
The cash market on Tuesday recorded a sudden increase
in overnight rates after a large decline reported a day earlier.
The overnight, according to Standard Chartered
Bank was pushed by small banks which are “constantly seen on the market funding”.
The market recorded the six-week highest traded
rate that remained at 20 per cent while there was an increase in volume to 23.5bn/-
compared to last week reported volumes below 15bn/-.
“The market is experiencing some liquidity tightness
driven by funding from small banks constantly seen on the market funding,” the
Bank said on Wednesday daily market report.
The bank also said “today (Wednesday) the BoT is
selling 100bn/- T-bills, the spiking interbank rates will have a large impact
on the auction outcome with interbank players expected to be more risk averse
and demand high returns on the issue.”
On other hand the situation on the interbank
market helped to strengthen the shilling to trade flat against the US dollar as
demand continued to be well matched with supply.
“Today (Wednesday) we expect a similar trend with
low level of volatility,” Standard Chartered said.
Source: tzexchange.blogspot.com
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