Bank of Tanzania reports strong interest in 7-year Treasury bond
Tanzania Securities Limited (TSL) has hailed the liquidity of the country's economy following a recent bond auction.Tanzania Securities Limited (TSL) has hailed the liquidity of the country's economy following a recent bond auction.
The Bank of Tanzania recently auctioned a seven-year Treasury bond of 10.08 per cent, which had a weighted average yield to maturity of 15.25 per cent, the Tanzania Daily News reports.
According to TSL, this is higher than the figure recorded the last time the Bank staged a bond auction, while this latest session was oversubscribed by 40 per cent.
This, it said, serves to demonstrate that liquidity is continuing to improve both in the Tanzanian economy and the banking industry.
As a result, the Bank of Tanzania might find itself in a good position to tackle problems such as inflation.
A recent increase in interest rates could also be behind the level of interest in the bond auction, the Tanzania Daily News speculated.
The publication noted that the rate now stands at 15.16 per cent, which may be "one of the reasons that hooked massive investments".