Investors' appetite for Tanzania's Treasury bonds improves

Jan 15, 2014

The Bank of Tanzania (BoT) has revealed that the country's latest two year bond auction was oversubscribed - reaching Sh56.05 billion (€25.3 million) although 30.9 billion were originally sought.

The Bank of Tanzania (BoT) has revealed that the country's latest two year bond auction was oversubscribed - reaching Sh56.05 billion (€25.3 million) although 30.9 billion were originally sought.

Experts believe these results were a sign of improving liquidity in the economy, following a period of liquidity pressure.

Tight liquidity is among the instruments applied by the Central Bank to tame growing inflation in the economy, but, according to analysts quoted by Tanzania Daily
News, the recent period of tight liquidity was to be expected - given that it is a frequent occurrence at that time of the year.

"The New Year's Eve Treasury Bills Auction results were a pure reflection of the liquidity pressure facing the market due to the massive end of the year outflows," said Head of Treasury Henry Lesika, quoted by Tanzania Daily News.

Investors' participation in the country's previous Treasury bond auction was indeed significantly below expectations.

The Bank of Tanzania (BoT) reported that the auction conducted on December 31st was undersubscribed, with only 39 bids out of 75 received being successful.ADNFCR-2976-ID-801682296-ADNFCR