Bank lending interest rates rise slightly

On the contrary, according to BoT, the overall deposit rate declined to 9.05 per cent from 9.19 per cent. The data shows that the spread between lending and deposit rates rose to 7.06 per cent in August from 6.89 per cent gap of July.

At the same time, the short-term lending rate-up to one year-increased slightly to 14.36 per cent from 14.31 per cent in July 2015. While the 12 months deposit rate remained at 10.50 per cent.

As the result BoT said, “the spread between 12 months deposit rate and short-term lending rate (spread) to 3.86 percentage points from 3.81 percentage points”. High lending interest rate scoffed off investors as it increases the cost of capital thus making a venture expensive. On the other hand low deposits rate signifying that either the liquid ratio is on the higher side or depositors have other venues for investments.

In the corresponding month, the BoT purchased 327bn/- repurchase agreements (Repos) compared to 35bn/- of the same in July. “Reflecting an improvement in the liquidity situation in the market,” BoT said adding “the repo rate declined significantly to 12.1 per cent from 22.43 per cent in July.”

Dar es Salaam Stock Exchange (DSE) reported on third quarter that its weighted average market Price Earnings (PE) ratio for domestic listed companies was 16.93 times as of end of September compared to the trailing PE ratio of 17.31 times during last quarter.

Source:- http://dailynews.co.tz/

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