Interest rates were low in Nov 2014, says BoT

By The guardian reporter

Bank of Tanzania (BoT)

Commercial banks’ interest rates during November 2014 were generally lower compared with those of the corresponding month in 2013, the Bank of Tanzania (BoT) Monthly Economic Review for ............................
December 2014 has said.

 

The overall time deposit rate declined to 8.15 percent in November 2014 from 8.5 percent in November 2013, while 12-month deposit rate eased to 10.68 percent from 11.67 per cent and the overall lending rate fell to 15.64 percent from 16.25 percent, according to the review.

 

In contrast, lending rates for short-term loans of up to one year averaged 14.38 percent in November 2014 from 14.10 per cent in November 2013.

Consistent with these developments, the spread widened to 3.7 percentage points from 2.43 in November 2013, it says.

 

It further said, the overall weighted average yield (WAY) increased to 14.04 percent from 12.82 percent in the preceding month.

 

In the Treasury bonds market, 7-and 10-year bonds worth 60bn/- and 45bn/-, respectively, were offered in accordance with the issuance calendar with investors responding with bids amounting to 71.9bn/- for the 7-year bond and 31.1bn/- for the 10-year bond. 

 

The successful bids amounted to 66.6bn/- for the 7-year bond and 20bn/- for the 10-year bond. Weighted average yield to maturity for 7-year bond increased to 15.97 percent in November 2014 from 15.75 percent recorded in the preceding auction, while that of 10-year bond increased to 16.5 percent from 16.33 percent.

 

In November 2014, domestic revenue amounted to 790.7bn/-, about 86 percent of the target, out of which tax revenue amounted to 739.7bn/- . 

The tax revenue outturn was about 90 percent of the target and accounted for nearly 94 percent of total domestic revenue. Except other taxes, all other government revenues were below the estimates.

 

The shortfall of tax revenue from target was largely on account of non-realisation of excise duty on employment taxes coupled with a decline of importation of taxable and dutiable goods, it stated.

Government expenditure for November 2014 amounted to 876.8bn/-, and was about 61 percent of the estimate. 

 

Recurrent expenditure was 800bn/- or 83.2 percent of the estimate and the balance was development expenditure.

 

Wages and salaries, other recurrent expenditure, development expenditure and interest costs were the main expenditure items in that order. Save interest costs, all other expenditures were lower than the estimated amounts.

 

Meanwhile, the stock of Government’s domestic debt increased by 16.44bn/- to 7,669.3bn/- in

November 2014, from the amount recorded as at end of the preceding month. The increase was mainly due to new issuance of government securities.

 

On annual basis, domestic debt increased by 1,701.1bn/- from 5,968.2bn/- recorded at the end of the corresponding period in 2013 due to large issuance of Government securities that outweighed maturing obligation.

 

The proportion of domestic debt owed to commercial banks in November 2014 decreased to 53.9 percent, while the debt owed to the Central Bank slightly increased to 19.3 percent from the level recorded in October 2014

New debt instruments issued during November 2014 amounted to 216.3bn/-, out of which 86.6bn/- was Treasury bonds and 130.6bn/- was Treasury bills.

Cumulative new instruments for the year ending November 2014 amounted to 2,852.1bn/- , out of which 1,847.2bn/- Treasury bills and 1,004.9bn/- was Treasury bonds.

SOURCE: THE GUARDIAN