Treasury bills oversubscribed even as yields continue falling

Dar es Salaam. Investors continue to show high appetite for government debt instruments despite reduced yields. Treasury Bills floated Wednesday by Bank of Tanzania (BoT) were oversubscribed by Sh55 billion.

The auction results shows that yields for T-Bills reduced to a weighted average yield of 4.54 per cent per annum, lower than 4.84 per cent recorded during the previous auction held on March 7.

The yields reduction experienced on 35 days maturity to zero per cent from 2 per cent recorded in the previous auction while that for 91 days was 2.25 per cent from 2.78 per cent. The yields for six months maturity dropped to 3.23 per cent from 3.64 per cent while the one year maturity yields was 5.12 per cent during Wednesday’s auction, lower than 5.83 per cent of March 7.

The reduction of yields for government debt instrument was part of BoT’s initiatives to scale up credit as banks are currently opting for securities than lending to private sector.

Commercial banks account for largest share of investors on government debt instruments, followed by pension funds, insurance companies and individual investors.

The auction result shows that a total of 112 bids valued Sh224.5 billion were recorded but only 72 valued Sh160 billion, less than offered amount, ended up being successful.

Many bids were on 35 days, six months and one year maturities while one month maturity received no bid.

The three months maturity received seven bids valued Sh7.5 billion but only one bid valued Sh3 billion was successful while six months received 19 bids worth Sh89.4 billion.

but only 11 bids valued Sh45 billion were successful.

The one year maturity received 86 bids worth Sh127.5 billion but only 60 bids valued Sh112 billion were successful.