Impact of Sovereign Yield Curve on Corporate Debt Market

Muhtasari

• TANZANIA: THE Bank of Tanzania’s launch last week of Tanzania’s Sovereign Yield Curve may not have attracted the same public attention as a major policy announcement or a large government investment.
• A yield curve may sound like a technical instrument designed for economists, bankers and investment professionals.
• With a sovereign yield curve, the company and potential investors have a reference point: the yield on a government security of comparable maturity.
• Investors should therefore move beyond asking, “What is the coupon?” and begin asking, “What yield am I actually receiving, and how does it compare with other investment opportunities?” The sovereign yield curve makes.
• Perhaps the greatest longterm significance of the yield curve lies in its potential contribution to Tanzania’s corporate debt market.