INVESTORS’ appetite in the Treasury bills auction held on Wednesday was high, attracting bids worth 458.33bn/-, which is almost three times increase compared to the amount sought to be raised.
According to the Bank of Tanzania (BoT) auction summary, the amount planned to be raised was 169bn/- and at the end 211.09bn/- retained as successful bids.
The outstanding performance is an indication that there is sufficient liquidity among major investors in the government securities -- commercial banks, pension funds and some microfinance institutions.
BoT uses the short term government note to mop excess liquidity in the circulation. Interest rates on the 364 tenure declined to 11.62 per cent compared to 11.96 per cent of the preceding two sessions.
Yield rate on 182 days tenure declined to 9.16 per cent compared to 9.42 per cent of the previous session. Interest rates for the 91 days offer was 4.10 per cent while in the preceding session there was no yield rate.
For the 35 days tenure, interest rates was 4.80 per cent the same as in the preceding session. Weighted average price for successful bid decreased to 10.86 per cent compared to 10.96 per cent of the last session.
The 364 days tenure attracted bids worth 292.44bn/- compared to 100bn/- offered to the market and at the end 146bn/- was retained as successful amount. The 182 days offer attracted bids worth 165.79bn/- compared to 65bn/- offered to the market for bidding and 65bn/- was kept as successful amount.
The two tenures, 364 and 182 days offer commanded 99 per cent to the total bid tendered to the market in the Wednesday auction. The number of successful bids was 127 out of 320 that participated in the one year treasury bills auction.
The highest bid/100 and lowest bid/100 was 90.52 and 84.00 respectively while minimum successful price/100 was 89.31 and with weighted average price for successful bid was 89.61.