Bank of Zam­bia Raises ZMW598mil­lion in Un­der­sub­scribed Trea­sury bill Sale

Zambian Business Times - - FRONT PAGE -

The Bank of Zam­bia on Thurs­day 12 Oct. raised ZMW598mil­lion ($62mil­lion) in Trea­sury bill sales. On of­fer was ZMW900mil­lion while bids to­taled ZMW598mil­lion off which ZMW530mil­lion were sat­is­fied. Bid cover ra­tio was 1.12. The auc­tion was 34% un­der­sub­scribed in sale that was con­cen­trated in the 1yr tenor which ac­counted for 75% weight­ing.

Ap­petite for the 365 day tenor was high­est due to at­trac­tive yields pegged at 15.5% a 45bps (0.45%) de­cline from a fort­night ago.

The Kwacha yield curve has for weeks been kinked at the 1yr point mak­ing it at­trac­tive to lock in money for a year. How­ever the in­ter­est rate view is chang­ing fol­low­ing Zam­bia’s IMF pack­age de­lay which is poised to ex­ert pres­sure on bond and Trea­sury bill yields. This will be as a re­sult of govern­ment us­ing the do­mes­tic money mar­kets to raise fund­ing for its eco­nomic pro­grams.

In­ter­est rates “will go up very sig­nif­i­cantly” if debt is not man­aged and econ­omy over­heats, Bank of Zam­bia Gov­er­nor Denny Kalyalya says in in­ter­view in Wash­ing­ton.

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