AfricaPress-Tanzania: THE Interbank Money Market (IMM), returned to normal after transactions grew by over 18 folds last week, which was the highest in two weeks.
The value of transaction, on weekly basis, at beginning of the month dropped to 10 years low as analysts said banks were loaded with cash due to a slow-down in lending activities.
Orbit Securities said yesterday that the last week volume was 122.5bn/-as interbank rate remained stable at 4.14 percent and 66 basis points (bps), lower than the week before.
“Activities on the IMM got back to normal during the week after transactions grew more than eighteen folds.
“Value of transactions was even more than twice the value a week before last,” Orbit’s Weekly Market Synopsis report said.
Tanzania Securities said in its weekly blast that the weighted average rate (WAR) for the interbank market decreased to close at 4.14 per cent from 4.80 per cent the previous week.
The highest and lowest rate was 5.50 percent and 4.00 percent from 4.85 percent and 4.80 percent respectively from the preceding week.
“…Notwithstanding the decrease in the weighted average rate (WAR) during the previous week, we still anticipate that WAR to be within a range of 4.60 percent to 5.00 percent with slight volatility in the high and low rate,” Tanzania Securities said yesterday..
The volume traded during the week increased by 88.50 per cent to 122.5bn/-from 6.5bn/-recorded in the previous week.
Previous, Orbit, the leading stock brokerage firm in the country said in the week ending the first Friday of this month that IMM experienced the slowest trading week in the last ten years due to Covid 19 pandemic.
They said the turnover on weekly basis dropped by 92 percent to 4.5bn/-and blaming Covid 19 for low activities as lending activities in the economy dwindled.
Data showed that the last time weekly turnover was this low was the last week of July 2010.
NMB Bank, one of the largest lenders in the country, projected that with end of this fiscal year in this quarter, activities in the overnight market are expected to improve further.
“…[The] rates [are expected to] slightly going up as players look to cover their end of fiscal year shilling obligations,” NMB said in its market digest for quarter one.
The digest said this year’s first quarter marked a continuation of a liquid market with activities increasing by 43 percent as interbank players positioned themselves to kick off the year.
Trading in the overnight market was up to 1.26tri/-in Q1 from 887bn/-recorded in the last quarter of 2019.
Consistent with Liquidity progress, the overall IMM rates remained below 5.0 percent to average at 4.11 percent in quarter one slightly above 4.06 percent recorded in the previous quarter.
