Bank of Zambia Sales $78million Treasury bill
The Bank of Zambia sold the Kwacha equivalent of $USD78million in Thursday 23 Novembers auction.
The Bank of Zambia sold the Kwacha equivalent of $USD78million in Thursday 23 Novembers auction. The offering was 17% undersubscribed with bid cover of 0.78. On offer was the standard ZMW900million with appetite in bids amounting to ZMW780million. Of this 83.3% was satisfied with the highest demand in the 1yr bucket – weighing eighty-two – 82% of the auction – and is currently paying 16%.
Yields on the Zambian Kwacha curve have ticked higher by 100bps on the long end and have found ground at those levels in the medium term. The 9m tenor recorded a 100bps decline to 13% and this bucket account for 16.3% of the auction size.
The market expects more domestic market participation from government to fund its current needs especially post August after the IMF deal closure did not materialize. The Zambian T-bill market has competition from Microfinance institutions that are paying 1yr deposits for between 20-23% which makes the treasury bill less attractive for smaller players.
As at Friday 24 November the Kwacha was still trading above 10.1/USD.