BOZ sells USD75mn in T-bills…

• One-year money is now priced at 20.5001% • T-bills cur­rently more at­trac­tive that kwacha bonds

Zambian Business Times - - FRONT PAGE -

The Bank of Zam­bia sold the kwacha equiv­a­lent on USD85mil­lion in trea­sury bills in last Thurs­days auc­tion.

On of­fer was K950mil­lion of which ap­petite in bids to­talled K879mil­lion. Of this K769mil­lion was ab­sorbed rep­re­sent­ing a bid cover ra­tio of 1.14. Real yields on kwacha trea­sury bills widened fur­ther in Thurs­days auc­tion as re­turns rose 145bps from the 1 – year to 20.5001% and 150bps for the 91 – day as­sets to 14.5%.

Yields re­main at­trac­tive given the cur­rent in­fla­tion rate of 8.1%.

The one-year pa­per is earn­ing a sim­i­lar re­turn as 5 -year money at 20.4%. This makes in­vest­ing in kwacha bonds very unattrac­tive be­cause shorter du­ra­tions will earn in­vestors a bet­ter or sim­i­lar re­turn.

Next auc­tion will be held on 13 septem­ber.

Trea­sury bill yields as ex­tracted from Bank of Zam­bia web­site.

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