BOZ T-bill auc­tion in ‘anaemic sub­scrip­tion’ as mar­ket liq­uid­ity

Zambian Business Times - - FRONT PAGE -

Bank of Zam­bia sold the Kwacha equiv­a­lent of USD15mn in trea­sury bills in an auc­tion that was deeply un­der­sub­scribed with ZMW950mn on of­fer yet bids amount­ing to ZMW152mn were fully ab­sorbed. The auc­tion recorded a bid cover level of 0.15 with the yield curve un­changed from a fort­night ago. This trea­sury bill sale came 6 busi­ness days af­ter the deeply over­sub­scribed bond auc­tion where the mar­ket was mopped of ZMW1.7bn in ap­petite. Mar­ket liq­uid­ity has tight­ened as a re­sult of the bond auc­tion that saw play­ers lock in long term money at at­trac­tive yields. Eighty-eight (88%) of the ane­mic ap­petite of ZMW151mn was locked up in 1yr trea­sury bills pay­ing 17.56%. Yields pre­mium above in­fla­tion still re­main at­trac­tive as CPI in Zam­bia is still sin­gle digit though the last two months has seen the 6-8% BOZ tar­get come un­der threat.

Trea­sury bill auc­tion per­for­mance as ex­tracted from Bank of Zam­bia.

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