BoT T-bills auction records over-subscription

The Bank of Tanzania’s (BoT) Treasury Bills Auctions for the month of March was oversubscribed by Shs210.9 billion. In the two auctions, T-bills worth Shs107.7 billion per auction were provided across the 91-day, 182-day and 364-day tenors at the primary auctions.

However, the Treasury bill auctions summary published by BoT shows that successful bids amounted to Shs206.9 billion. According to the central bank, there has been a drop in yields fetched 5.25 per cent from 5.72 per cent in February 2020. Treasury bills are short-term sovereign debt securities maturing in one year or less.

They are sold at a discount and redeemed at par. The bills are by nature the most liquid money market securities and are backed by the guarantee of the government. The government, through the Bank of Tanzania, issues the treasury bills to provide short-term fund- ing for government budget deficit.

Meanwhile, the BoT conducted 2- and 10-year Treasury bond auctions worth Shs137.3 billion and Shs122.0 billion respectively. The central bank auction summa- ry shows that the 2- and 10-year treasury bonds were oversubscribed by Shs281.1 billion and Shs82.7 billion.

According to the summary, at the end the government retained Shs137.3 billion for 2-year bond and Shs122.1 billion for 10-year bond- as successful amounts. The weighted average yield to maturity for 2-year bond fell by 8.32 per cent compared to 20.26 per cent of the previous session while weighted average coupon yield for 10-year bond decreased by 12.90 per cent compared to 14.53 per cent of the preceding session.