STRONG investors demand on the Treasury bills auction held by the Bank of Tanzania (BoT) last Wednesday was a clear indication of high liquidity in the market.
According to the auction summary, the session attracted bids worth 188.17bn/- compared to 141bn/- offered to the market for bidding. Despite the oversubscription, the government retained 159.60bn/- as successful amount.
High investors’ appetite greeted the 364 days offer that attracted over 90 per cent of the bids which is 178.57bn/- out of 188.17bn/-.
Other tenures namely, 182 days, 91 days and 35 days attracted bids worth 9.20bn/-, 200m/- and 200m/-, respectively.
The government makes use of the 364 and 182 instrument to raise funds for financing budget while the 91 and 35 days offers are used to mop up excessive liquidity in the circulation.
Yield rates for the 364 days offer declined slightly to 9.03 per cent compared to 9.06 per cent of the session held two weeks ago.
The yield for the 182 days declined to 5.13 per cent from 5.18 per cent of the previous session.
Commercial banks take over 60 per cent of the market share in the investment on the treasury bills.
Other key investors are pension funds, insurance companies, some microfinance institutions and individual investors