Comprehensive intelligence on Tanzania's government securities market and interbank cash market as of February 2026 — auction performance, yield compression, liquidity dynamics, and rate structure across all tenors.
Tanzania's Treasury bill market was characterised by persistent oversubscription in February 2026, reflecting robust investor appetite driven by stable macroeconomic conditions. The Bank conducted two auctions with a combined tender size of TZS 440.9 billion, attracting total bids of TZS 1,061.4 billion — a tender-to-offer ratio of approximately 2.4x. The surge in demand compressed the overall weighted average yield (WAY) further to 5.68 percent from 5.89 percent in January 2026, continuing a structural downward trend from the 11.93 percent recorded in February 2025.
| Tenor | Jan-25 | Feb-25 | Mar-25 | Apr-25 | Jun-25 | Aug-25 | Oct-25 | Dec-25 | Jan-26 | Feb-26 | YoY Δ (bps) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 35-Day | 6.50 | 6.50 | 6.50 | 6.50 | 6.50 | 6.50 | 5.64 | 5.38 | 5.36 | 4.75 | ▼ −175 |
| 91-Day | 7.76 | 7.76 | 7.42 | 7.50 | 7.50 | 7.36 | 6.08 | 5.93 | 5.73 | 4.97 | ▼ −279 |
| 182-Day | 8.20 | 8.20 | 8.20 | 8.47 | 8.24 | 7.46 | 5.92 | 5.91 | 5.85 | 5.85 | ▼ −235 |
| 364-Day | 12.63 | 11.99 | 10.11 | 8.92 | 8.92 | 6.79 | 6.45 | 6.24 | 6.21 | 6.20 | ▼ −579 |
| Overall WAY | 12.51 | 11.93 | 10.10 | 8.86 | 8.89 | 6.83 | 6.25 | 5.87 | 5.89 | 5.68 | ▼ −625 |
The Bank conducted auctions for 15-year and 25-year Treasury bonds in February 2026, offering a combined tender size of TZS 399.5 billion. These attracted exceptional demand with bids worth TZS 2,778.1 billion — a 6.95x oversubscription ratio — of which TZS 520.2 billion were successful. Weighted average yields to maturity fell sharply: the 15-year bond to 10.78 percent and the 25-year bond to 11.99 percent.
| Tenor | Jan-25 | Feb-25 | Apr-25 | Jun-25 | Aug-25 | Oct-25 | Dec-25 | Jan-26 | Feb-26 | YoY Δ (bps) |
|---|---|---|---|---|---|---|---|---|---|---|
| 2-Year Bond | 11.64 | 12.55 | 12.08 | 12.08 | 12.17 | 10.05 | 10.05 | 10.05 | 10.05 | ▼ −250 |
| 5-Year Bond | 12.41 | 12.41 | 13.14 | 12.94 | 13.18 | 10.54 | 10.54 | 10.54 | 10.54 | ▼ −187 |
| 7-Year Bond | 9.71 | 9.71 | 9.71 | 9.71 | 9.71 | 9.71 | 9.71 | 9.71 | 9.71 | → 0 |
| 10-Year Bond | 14.08 | 14.08 | 14.26 | 14.26 | 13.74 | 12.45 | 12.45 | 11.30 | 11.30 | ▼ −278 |
| 15-Year Bond | 15.76 | 15.76 | 14.63 | 14.63 | 13.91 | 12.08 | 12.08 | 12.08 | 10.78 | ▼ −498 |
| 20-Year Bond | 15.71 | 15.28 | 15.11 | 14.50 | 14.50 | 13.55 | 12.02 | 12.02 | 12.02 | ▼ −326 |
| 25-Year Bond | 15.84 | 15.84 | 15.84 | 14.80 | 14.42 | 13.19 | 13.19 | 13.19 | 11.99 | ▼ −385 |
The Tanzania government securities yield curve has undergone dramatic bull-flattening over the past twelve months. Short-end yields have collapsed by over 600 basis points while long-end yields have declined 300–500 basis points, reflecting improving macroeconomic conditions, strong liquidity in the banking system, and BoT monetary policy anchoring via the 5.75% Central Bank Rate.
The interbank cash market (IBCM) continued to facilitate shilling liquidity trading among banks in February 2026. Total transaction value decreased slightly to TZS 2,796.5 billion from TZS 2,868.9 billion. The market remained dominated by 7-day transactions at 63.5 percent of total activity. The overall IBCM rate eased to 6.34 percent from 6.40 percent, consistent with adequate banking system liquidity and the CBR anchor of 5.75 percent.
| Tenor | Jan-25 | Feb-25 | Apr-25 | Jun-25 | Aug-25 | Oct-25 | Dec-25 | Jan-26 | Feb-26 | MoM Δ (bps) |
|---|---|---|---|---|---|---|---|---|---|---|
| Overnight | 7.69 | 7.87 | 7.90 | 7.93 | 6.15 | 6.45 | 6.00 | 6.13 | 6.01 | ▼ −12 |
| 2–7 Day | 7.74 | 8.02 | 7.98 | 7.96 | 6.52 | 6.29 | 6.30 | 6.34 | 6.31 | ▼ −3 |
| 8–14 Day | 8.51 | 8.62 | 8.08 | 8.12 | 6.71 | 6.92 | 6.26 | 6.74 | 6.83 | ▲ +9 |
| 15–30 Day | 8.58 | 8.77 | 8.37 | 6.95 | 6.87 | 7.07 | 6.40 | 7.06 | 6.96 | ▼ −10 |
| 31–60 Day | 9.03 | 8.00 | 8.53 | 8.53 | 6.90 | 7.28 | 7.20 | 7.23 | 7.00 | ▼ −23 |
| 61–90 Day | 6.75 | 7.00 | 9.11 | 9.14 | 9.14 | 9.14 | 8.11 | 9.96 | 7.00 | ▼ −296 |
| 91–180 Day | 7.87 | 10.42 | 12.00 | 12.00 | 7.00 | 9.75 | 8.89 | 6.75 | 7.00 | ▲ +25 |
| 181+ Day | 10.93 | 10.93 | 10.93 | 10.93 | 10.93 | 10.93 | 10.93 | 10.93 | 12.00 | ▲ +107 |
| Overall IBCM Rate | 7.80 | 8.06 | 8.00 | 7.94 | 6.48 | 6.38 | 6.29 | 6.40 | 6.34 | ▼ −6 |
The reverse repo rate was maintained at 5.75% throughout January and February 2026, aligned with the CBR. BoT used reverse repo operations to absorb excess shilling liquidity and steer the 7-day IBCM rate within the ±2 percentage point corridor around the CBR (3.75%–7.75%). The IBCM rate of 6.34% sits comfortably within this band, confirming the effectiveness of the current monetary policy transmission mechanism.
Commercial bank interest rates remained broadly stable in February 2026, with the overall lending rate virtually unchanged at 15.11 percent. Negotiated rates for prime customers continued to compress, while the short-term interest rate spread narrowed to 5.59 percentage points — the tightest in the observed period.
| Rate Type | Feb-25 | Mar-25 | Apr-25 | Dec-25 | Jan-26 | Feb-26 | MoM Δ (bps) |
|---|---|---|---|---|---|---|---|
| // LENDING RATES | |||||||
| Overall Lending Rate | 15.14 | 15.50 | 15.16 | 15.24 | 15.10 | 15.11 | ▲ +1 |
| Short-Term Lending (Up to 1 Yr) | 15.77 | 15.83 | 16.15 | 15.46 | 15.49 | 15.41 | ▼ −8 |
| Negotiated Lending Rate | 13.42 | 12.94 | 12.88 | 12.38 | 12.25 | 12.19 | ▼ −6 |
| // DEPOSIT RATES | |||||||
| Savings Deposit Rate | 2.98 | 2.86 | 2.89 | 3.02 | 2.94 | 2.98 | ▲ +4 |
| Overall Time Deposit Rate | 8.13 | 8.00 | 7.82 | 8.36 | 8.33 | 8.32 | ▼ −1 |
| 12-Month Deposit Rate | 9.48 | 8.14 | 9.27 | 9.58 | 9.70 | 9.82 | ▲ +12 |
| Negotiated Deposit Rate | 11.40 | 10.35 | 10.52 | 11.66 | 11.74 | 11.48 | ▼ −26 |
| Short-Term Interest Rate Spread | 6.29 | 7.69 | 6.88 | 5.88 | 5.79 | 5.59 | ▼ −20 |
TICGL's independent financial market intelligence for Tanzania's government securities and interbank markets — February 2026.
1. Historic Yield Compression: Short-End Has Repriced by Over 600bps. The 364-day T-bill yield has fallen from 11.99 percent (February 2025) to 6.20 percent (February 2026) — a 579 basis point decline in twelve months. The overall T-bill WAY dropped from 11.93 percent to 5.68 percent over the same period. This is among the most aggressive short-end repricing episodes in Tanzania's recent market history. Drivers include the BoT's shift to an interest-rate based monetary policy framework, excess banking system liquidity, and strong domestic investor demand for government paper.
2. Bond Market Oversubscription at 6.95x — A Structural Demand Signal. The extraordinary bid-to-offer ratio of 6.95x for the 15/25-year bond auction in February 2026 — with TZS 2,778.1 billion in bids against a TZS 399.5 billion offer — signals a deep structural demand imbalance for long-duration Tanzania sovereign debt. Pension funds, insurance companies, and commercial banks are competing aggressively for limited supply. TICGL expects the government will capitalise on this demand to gradually extend the yield curve beyond 25 years.
3. Yield Curve Inversion Alert: 7-Year Bond at 9.71% vs 15-Year at 10.78%. The 7-year government bond yields 9.71 percent — lower than the 10-year (11.30%), 15-year (10.78%), and 20-year (12.02%) bonds. This local inversion at the 7-year point is technically unusual and may reflect illiquidity in that specific tenor rather than a macroeconomic signal. The BoT may wish to conduct targeted 7-year reopening auctions to normalise the mid-curve.
4. IBCM Liquidity is Adequate — But Duration Preference is Telling. The 63.5% dominance of 7-day transactions in the IBCM reflects banks' preference for short-term liquidity management — a sign of tactical, rather than structural, liquidity needs. The overall IBCM rate of 6.34% sits 59 basis points above the CBR of 5.75%, well within the ±200bps policy corridor.
5. Interest Rate Spread Compression Creates Opportunity for Borrowers. The short-term interest rate spread narrowed to 5.59 percentage points in February 2026 — the tightest in the observed period. This compression benefits creditworthy private sector borrowers who can negotiate preferential lending rates. For TICGL's private sector clients, this creates a window to restructure existing debt at lower rates ahead of anticipated monetary policy easing cycles in 2026.