By BUSINESS REPORTERBANK of Tanzania (BoT) will begin automated trading of government securities next month and plans to set up a central depository system to improve efficiency and boost market liquidity.
The move is seen as an important step towards opening up the east African country's debt market to foreign investors who are currenty barred from participating in both the securities and equities markets.
"The new system is meant to modernize, promote efficiency, foster management of risks and enhance market liquidity," the central bank said in a statement on its website on Thursday.
BoT said under the new changes, only banks and brokers licensed by the country's capital markets regulator would be able to directly access the electronic trading system.
There has been increasing investor interest in Tanzania's fixed income and currency markets, with the country pledging to open up its capital account by 2015.
Pension funds, commercial banks and insurance companies are the main investors in government securities in east Africa's second biggest economy.
The trading of government securities is currently done manually, with investors required to physically take their bids to central bank offices.
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