Bank of Zam­bia Sales $78mil­lion Trea­sury bill

Zambian Business Times - - FRONT PAGE -

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.

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