In April 2025, Tanzania's financial markets demonstrated robust activity, reflecting strong investor confidence and effective liquidity management. The Government Securities Market saw significant oversubscription, with Treasury bill bids reaching TZS 275 billion against a tender size of TZS 218 billion and Treasury bond bids totaling TZS 1,076.7 billion against TZS 481.7 billion, driven by declining yields (e.g., Treasury bills at 8.86%, down from 10.10%). The Interbank Cash Market recorded a 48.5% surge in transaction volume to TZS 2,611.1 billion, with a stable interest rate of 8.00%, supporting efficient liquidity redistribution among banks. The following table summarizes these key figures.

1. Government Securities Market

The Government Securities Market in Tanzania, encompassing Treasury bills and bonds, is a critical component of public debt financing and monetary policy implementation. The data you provided for April 2025 highlights strong investor confidence, high liquidity, and favorable macroeconomic conditions.

Key Figures and Details:

• Treasury Bills:
  • Number of Auctions: 2 auctions were conducted in April 2025.
  • Total Tender Size: TZS 218 billion, representing the amount offered by the government.
  • Total Bids Received: TZS 275 billion, indicating oversubscription (bids exceeded the tender size by approximately 26.15%, calculated as [(275 - 218) / 218] × 100).
  • Successful Bids: TZS 208.2 billion, meaning 95.5% of the tender size was successfully allocated (208.2 / 218 × 100).
  • Weighted Average Yield (WAY): Decreased to 8.86% in April 2025 from 10.10% in March 2025, a reduction of 1.24 percentage points.
• Treasury Bonds:
  • Types Offered: 2-year, 10-year, and 20-year bonds.
  • Total Tender Size: TZS 481.7 billion.
  • Total Bids Received: TZS 1,076.7 billion, reflecting significant oversubscription (bids were 2.24 times the tender size, calculated as 1,076.7 / 481.7).
  • Successful Bids: TZS 519.6 billion, indicating that 107.8% of the tender size was allocated (519.6 / 481.7 × 100), suggesting the government accepted slightly more than the offered amount, likely due to favorable bid terms.
  • Bond Yields:
    • 2-year bond: Yield decreased to 12.08% (specific prior yield not provided, but a decline is noted).
    • 10-year bond: Yield slightly increased to 14.26%.
    • 20-year bond: Yield decreased to 15.11%.
• Implications of Oversubscription:
  • High Liquidity in the Banking Sector: The significant oversubscription (TZS 275 billion vs. TZS 218 billion for Treasury bills and TZS 1,076.7 billion vs. TZS 481.7 billion for bonds) indicates that banks and other investors had ample liquidity to invest in government securities.
  • Stable Macroeconomic Conditions: The document notes moderate headline inflation at 3.2% in April 2025 and a stable Central Bank Rate (CBR) at 6%, which likely contributed to a predictable investment environment, encouraging participation in auctions.
  • Rising Investor Confidence: The high bid-to-tender ratios and declining yields for Treasury bills and most bonds suggest strong demand for government securities, reflecting confidence in Tanzania’s fiscal and monetary stability.

Analysis and Contextual Insights:

• Yield Trends:
  • The decline in the weighted average yield for Treasury bills (from 10.10% to 8.86%) aligns with the document’s indication of easing inflationary pressures (e.g., core inflation dropped to 2.2% from 3.9% year-on-year). Lower yields suggest reduced risk perceptions and strong demand, as investors are willing to accept lower returns for secure government securities.
  • The mixed yield movements for bonds (decreases for 2-year and 20-year, slight increase for 10-year) reflect varying investor expectations across maturities. The slight increase in the 10-year bond yield to 14.26% may indicate some market anticipation of longer-term risks, possibly related to global economic uncertainties mentioned in the document (e.g., a projected global growth slowdown to 2.8% in 2025).
• Monetary Policy Link: The document explains that the Bank of Tanzania uses the discount rate, based on Treasury bill rates plus a loaded factor, to manage liquidity. The decline in Treasury bill yields to 8.86% suggests that the discount rate may also have remained stable or decreased, supporting the CBR’s maintenance at 6% to ensure inflation stays within the 5% medium-term target.
• Lombard Facility: The banks can pledge government securities for overnight loans via the Lombard facility. The high subscription rates for both Treasury bills and bonds indicate that banks likely hold significant portfolios of these securities, enhancing their ability to access central bank liquidity when needed.
• Public Debt Financing: The document defines public debt as including domestic debt to finance fiscal deficits. The successful bids (TZS 208.2 billion for bills and TZS 519.6 billion for bonds) demonstrate the government’s ability to raise substantial funds domestically, reducing reliance on external debt (noted as a component of national debt).

2. Interbank Cash Market (IBCM)

The Interbank Cash Market facilitates short-term lending and borrowing among banks, enabling efficient liquidity management. The data provided for April 2025 shows increased activity and stable interest rates.

Key Figures and Details:

• Total Transactions:
  • April 2025: TZS 2,611.1 billion, a significant increase from TZS 1,757.7 billion in March 2025, representing a 48.5% rise (calculated as [(2,611.1 - 1,757.7) / 1,757.7] × 100).
• Share of Transactions:
  • 7-day Deals: 40.7% of total transactions, indicating a preference for slightly longer-term liquidity management.
  • Overnight Deals: 15.2%, reflecting the use of the shortest-term loans for immediate liquidity needs.
• Overall IBCM Interest Rate:
  • Decreased slightly to 8.00% in April 2025 from 8.12% in March 2025, a reduction of 0.12 percentage points.
• Implications:
  • Active Liquidity Redistribution: The 48.5% increase in transaction volume suggests banks were actively managing liquidity, likely due to increased economic activity or seasonal demands (e.g., supporting agricultural trade, as food stocks increased to 557,228 tonnes).
  • Stable Interest Rates: The slight decline in the IBCM interest rate to 8.00% aligns with the stable CBR at 6%, indicating that interbank rates remained within the Bank of Tanzania’s target band, ensuring monetary policy effectiveness.

Analysis and Contextual Insights:

• Monetary Policy Framework: The document outlines that the Bank of Tanzania uses the CBR to influence money supply and interbank rates. The stable CBR at 6% and the slight decline in IBCM rates to 8.00% suggest effective monetary policy transmission, maintaining rates within a target band conducive to economic growth and price stability (inflation target of 5%).
• Repos and Reverse Repos: The defines repurchase agreements (repos) and reverse repos as tools used by the Bank of Tanzania to manage liquidity in the interbank market. The high transaction volume (TZS 2,611.1 billion) likely includes repo transactions, which facilitate short-term liquidity adjustments using government securities as collateral.
• Liquidity Dynamics: The document’s mention of the Lombard facility, where banks can borrow overnight from the central bank, complements the IBCM by providing an alternative liquidity source. The increased IBCM transaction volume suggests banks preferred interbank lending over central bank facilities, possibly due to favorable rates or sufficient market liquidity.
• Economic Context: The increase in food stocks and the release of 29,834 tonnes of maize by the National Food Reserve Agency indicate government spending to stabilize food prices, which may have increased liquidity needs in the banking sector. The IBCM’s robust activity (TZS 2,611.1 billion) reflects banks’ ability to redistribute this liquidity efficiently.

Conclusion

In April 2025, Tanzania’s financial markets demonstrated robustness:

• Government Securities Market: The market saw strong demand, with Treasury bills oversubscribed (TZS 275 billion bids vs. TZS 218 billion tender) and bonds significantly oversubscribed (TZS 1,076.7 billion bids vs. TZS 481.7 billion tender). Declining yields for Treasury bills (8.86%) and most bonds (2-year: 12.08%, 20-year: 15.11%) reflect high liquidity and investor confidence, supported by stable macroeconomic conditions (3.2% inflation, 6% CBR).
• Interbank Cash Market: Transaction volumes surged to TZS 2,611.1 billion from TZS 1,757.7 billion, with 7-day deals (40.7%) and overnight deals (15.2%) driving activity. The slight decline in interest rates to 8.00% indicates effective liquidity management within the Bank of Tanzania’s target band.

The table is designed to present the data clearly and concisely, focusing on the metrics you highlighted for both markets. Since the request is to develop a table with key figures.