The primary government securities auctions conducted during the quarter ending September 2023, were generally undersubscribed, save for2- and 25-year bonds’ auctions according to the Economic Bulletin for the quarter ending September 2023 released by the Central Bank.
“The undersubscription was attributed to a decrease in appetite for the instruments owing to availability of other competing investment avenues in the market following improvement in business environment,” according to the Bank of Tanzania (BoT) report.
During the period, Treasury bills worth 1.038trn/- were auctioned to cater for government financing needs and liquidity management.
Total bids received amounted to 952.1bn/- , of which 813.2bn/- were successful with the weighted average yield increasing to an average of 6.97 percent from 4.49 percent in the corresponding quarter in 2022.
The Bank also conducted Treasury bonds auctions for all maturities, except for the 7-year to cater for government financing needs.
Treasury bonds worth 1.03trn/- were auctioned where bids received amounted to 824.7bn/- of which 679.0bn/- were successful.
Yields to maturity increased across all tenures relative to the previous quarter.
The Total transactions in the Interbank Cash market (IBCM) amounted to 7.77trn/- during the quarter, slightly higher than 7.57trn/- traded in the preceding quarter.
Transactions of 2 to 7-days remained dominant, accounting for 80.1 percent of the total market
Turnover with the overnight IBCM interest rate remaining stable, increasing to an average of 4.31 percent from 3.41 percent in the quarter ending September 2022.
Similarly, the 2 to 7-days and overall IBCM interest rates increased to 5.25 percent and 5.33 percent, from 4.69 percent and 4.57 percent, respectively