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Bank of Tanzania launches 5-year bond auction

24.01.2012

The Bank of Tanzania (BoT) has launched a new five-year Treasury bond auction as part of its plans to keep inflation under control by tightening liquidity.

The Bank of Tanzania (BoT) has launched a new five-year Treasury bond auction as part of its plans to keep inflation under control by tightening liquidity.

It began the process today (January 24th) and aims to raise Sh25 billion (€12 million) from the bond, which carries a fixed coupon of 9.18 percent per annum, the Citizen reports.

The coupon rate is the same as that of the last bond auction organised by the central bank, which took place in November 2011 and performed poorly.

A total of Sh30 billion was on offer, but only 20 bids totalling Sh8.4 billion were tabled, with 19 - worth Sh7.15 billion - accepted by the government.

The BoT has set a minimum bid size of Sh5 million for direct bidders, which is reduced to Sh1 million for those operating through primary dealers.

In addition, the bonds are to be listed for secondary trading on the Dar es Salaam Stock Exchange.

"It will be interesting to see how investors approach [this week's] auction," Standard Chartered noted in a market report.

Ecobank Group, which has offices in Dar es Salaam, recently launched the Ecobank Middle Africa Bond Index, which tracks the performance of domestic bond markets across sub-Saharan Africa.ADNFCR-2976-ID-801273510-ADNFCR