Demand for treasury bills remain high

 


DEMAND for Treasury bills remained high with government offering for sale 135bn/- that resulted into oversubscription despite cut in yield rates.

The Bank of Tanzania (BoT) summary issued on Wednesday shows further that a total of 55bn/- was sold in 364 days period, 45bn/- for 182 days, 32bn/- for 91 days tenure and 3bn/- for 35 days offer.

With the exception of 35-day treasury bills, the remaining offers were overly subscribed, an outstanding performance when compared to the previous session held early this month.

Similarly, a downward trend of yield rates was seen across all tenors but it did not discourage investors’ appetite for the short term government note.

The 364-day attracted bids worth 68.9bn/- but at the end only 8bn/- emerged as successful amount; for the 182-tenor, a total of 92bn/- was total amount tendered and 29bn/- was retained as successful bids. For the 91-day, the government accepted 10.2bn/- as successful bids although the amount tendered jumped to 67.2bn/-.

The weighted average interest rates on the 364 days declined to 10.20 per cent from 10.37 per cent of the preceding session. On 182 days, it slowed to 9.74 per cent from 9.78 per cent while the 91 days offer, it changed slightly to 6.85 per cent from 6.86 per cent.

Local participation in the short term treasury bills constitutes commercial banks, pension funds, insurance firms and some micro finance institutions.

According to analysts, the participation of foreigners will increase competitions and make short and long term securities post outstanding performance, for which the government may borrow from the public at the lowest cost.