At present, dealings in the money market by the Bank of Tanzania comprise only treasury bills. The money market in Tanzania is yet to be fully developed. Treasury bills are sold in the primary market through auctions, which started in August 1993, to commercial banks, other financial institutions, official entities, businesses, and individuals. However, the secondary market is still at an early stage of development, with little activity, and is, therefore, not yet fully effective. Treasury bills can be discounted at the Bank of Tanzania at the discount rate in force, at the discretion of the Bank.
Capital relates to money, which is locked up in a business enterprise.
The markets are the facilities and mechanisms through which money moves from idle holders to productive users, or between productive users themselves, depending on the benefits or advantages to be derived from each particular transaction . There are a number of reasons why governments have found it necessary to develop capital markets in their countries. Bank financing and government subsidies have for a long time been the source of finance for public corporations and companies. Many companies are private, whose right to transfer shares is severely restricted. A secondary market for government securities is in the process of being established.