The Latest

Bank of Tanzania Introduces Market-Aligned Treasury Bond Coupon Rates, Eliminates Fixed-Rate System

The Bank of Tanzania introduces a market-aligned system for Treasury bond coupon rates starting January 2025. The new approach replaces the static fixed-rate system, ensuring rates reflect prevailing market conditions. The changes aim to enhance liquidity, improve price discovery, and foster efficiency in Tanzania’s financial markets.
January 3, 2025
2 minute read
Tanzania Treasury Bond

The Bank of Tanzania (BoT) has announced a significant shift in determining Treasury bond coupon rates, effective January 2025.

Under this new system, coupon rates will be set and announced shortly before each bond auction, aligning them with prevailing market conditions. This replaces the previous practice where fixed coupon rates remained unchanged across multiple auctions, often resulting in misalignment with market dynamics.

The change is designed to improve liquidity in Tanzania’s bond market, enhance price discovery, and foster market efficiency. By ensuring that coupon rates reflect real-time economic conditions, the Bank of Tanzania aims to attract more investors and bolster the country’s financial ecosystem.

Key changes include:

  • Dynamic Coupon Rates: The rate for each bond will be announced in the auction’s call for tender at least one week prior to the auction date, ensuring alignment with market trends.
  • Removal from Issuance Calendar: Coupon rates will no longer be pre-published in the annual Issuance Calendar, allowing for greater flexibility.
  • Investor Participation: The auction process and participation modalities remain unchanged, with investors continuing to engage through Central Depository Participants (CDPs), including licensed banks and dealers.

Treasury bonds issued prior to January 2025 will remain unaffected.

Governor Emmanuel M. Tutuba stated, “This change is pivotal for improving liquidity, ensuring better price discovery, and enhancing the overall efficiency of Tanzania’s financial markets. By aligning coupon rates with market conditions, we are fostering a more robust and investor-friendly financial ecosystem.”

Tanzania’s Treasury bonds are crucial financial instruments, used to fund national development projects and manage public debt. They are issued in maturities ranging from 2 to 25 years, providing a diverse set of investment options for banks, pension funds, and retail investors. Historically, the fixed-rate system provided predictability but failed to adapt to changing market dynamics, limiting efficiency and investor flexibility.

RELATED:  Digital Payments Company Secures Payment System Provider License from Bank of Tanzania
Tweet
Share
Share
Share
Related Posts
DSE Dar es Salaam Stock Exchange & TanzaniaInvest Report
Read More

Dar es Salaam Stock Exchange Week 41 of 2025: Bond Turnover Surges +148.34%, Equity Turnover Rises +32.38%, TTP +60.98%, CRDB +12.28%

During week 41 of 2025, total bond turnover at the Dar es Salaam Stock Exchange (DSE) saw a substantial surge of +148.34% to TZS 409.14 billion, while equity turnover rose significantly by +32.38% to TZS 15.66 billion. The total market capitalisation rose slightly by +2.16% to TZS 21,757.85 billion. Four of the five DSE benchmarks advanced, with the Banks, Finance & Investment Index (BI) seeing the largest gain at +5.37%. Top-gaining stocks were TTP (+60.98%), CRDB (+12.28%), and MUCOBA (+11.76%), while the largest losses were recorded by TCCL (-13.56%), TCC (-5.75%), and MCB (-2.70%).
DSE Dar es Salaam Stock Exchange & TanzaniaInvest Report
Read More

Dar es Salaam Stock Exchange Week 40 of 2025: Bond Turnover Surges +254.52%, Equity Turnover Falls -28.22%, TTP +20.59%, DSE +16.00%

During week 40 of 2025, total bond turnover at the Dar es Salaam Stock Exchange (DSE) saw a massive surge of +254.52% to TZS 164.75 billion, while equity turnover fell significantly by -28.22% to TZS 11.83 billion. The total market capitalisation slightly fell by -0.56% to TZS 21,297.59 billion. Only one of the five DSE benchmarks advanced, the Commercial Services Index (CS) at +0.38%. Top-gaining stocks were TTP (+20.59%), DSE (+16.00%), and MKCB (+3.65%), while the largest losses were recorded by MCB (-11.90%), TCCL (-8.88%), and SWIS (-7.27%).
DSE Dar es Salaam Stock Exchange & TanzaniaInvest Report
Read More

Dar es Salaam Stock Exchange Week 39 of 2025: Equity Turnover Rises +9.28%, Bond Turnover Plunges -66.23%, AFRIPRISE +5.38%, DSE -14.97%

During week 39 of 2025, equity turnover at the Dar es Salaam Stock Exchange (DSE) reached TZS 16.48 billion, reflecting a week-on-week increase of +9.28%. Total bond turnover fell significantly by -66.23% to TZS 46.47 billion. The total market capitalisation slightly fell by -0.43% to TZS 21,418.13 billion. Only one of the five DSE benchmarks advanced, the Industrial & Allied Index (IA) at +0.64%. Top-gaining stocks were AFRIPRISE (+5.38%), DCB (+4.08%), and TTP (+3.03%), while the largest losses were recorded by DSE (-14.97%), SWIS (-14.95%), and MCB (-14.29%).
DSE Dar es Salaam Stock Exchange & TanzaniaInvest Report
Read More

Dar es Salaam Stock Exchange Week 38 of 2025 Report: Equity Turnover Rises to TZS 15.08 Billion (+159.15%), Bond Turnover Rises +39.81%, TTP +6.45%, MKCB -15.32%

Week 38 of 2025 at the Dar es Salaam Stock Exchange (DSE) saw a massive increase in trading activity compared to Week 37. Equity turnover reached TZS 15.08 billion, marking a surge of approximately +159.15% from Week 37's TZS 5.82 billion. Share volume also increased substantially to 7.75 million shares. Furthermore, total bond turnover increased by +39.81% to TZS 137.58 billion. The total market capitalisation decreased slightly by -0.61%. Of the five DSE benchmarks, the Banks, Finance & Investment Index (BI) experienced the greatest fall at -2.13%. The top-gaining stock was TTP (+6.45%), while the largest loss was recorded by MKCB (-15.32%).