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