Govt issues 15-year Treasury bond for first time

By The guardian reporter

Bank of Tanzania (BoT)

The government has for the first time issued a 15 year Treasury bond worth 15bn/- aimed at increasing the number of instruments in the capital market and maintain smooth redemption profile, the Bank of Tanzania (BoT) has said in its December 2013 Monthly Economic Review.


In the Treasury bond market, the central bank offered bonds of 7-year and 15-year maturities worth 49bn/- and 15bn/-, respectively.

“It is worth noting that, the 15-year Treasury bond was offered for the first time as one of the government’s initiatives to increase the number of instruments in the capital market while maintaining smooth recovery,” the review said.

Both auctions were oversubscribed, registering bids worth 88.7bn/- and 36.1bn/- for 7-year and 15-year bonds, respectively. The bank accepted bids worth 49bn/- and 15bn/- for the two respective bonds as planned.

Overall weighted average yield (WAY) for the 7- year bond decreased to 15.15 percent from 15.76 percent recorded in the preceding auction while that of 15 years was 16.65 percent.

In November 2013, total transactions in the Interbank Foreign Exchange Market (IFEM) increased to USD145.6m from USD110.9m transacted in the preceding month.

The bank participated in the market for liquidity management by selling USD79.7m compared with USD21.5m sold in October 2013.
In November 2013, the bank offered Treasury bills worth 305bn/- compared to 290bn/- traded in the preceding month.

Total demand amounted to 471.3bn/- and the bank accepted bids worth 350.8bn/- , the statement said, adding that WAY declined to 14.80 percent from 15.13 percent recorded in October last year.

Meanwhile, the Zanzibar government’s budgetary operations recorded an overall deficit of 0.8bn/- which was exclusively financed by external sources.
Total resources amounted to 35.4bn/-, of which 79.8 percent was domestic revenue and the balance was grants.

According to the review, total expenditure during the month amounted to 34.9bn/- while revenue collection during the month amounted to 28.3bn/- and 96.1 percent of the target for the month with tax revenue amounting to 26.9bn/-.

Recurrent expenditure was 97.3 percent of the estimates for the month while development expenditure was 98.4 percent of the estimates.
Out of the total development expenditure, 98.1 percent was foreign funded and the balance was government contribution.
 

SOURCE: THE GUARDIAN