BOZ sells USD75mn in T-bills…
• One-year money is now priced at 20.5001% • T-bills currently more attractive that kwacha bonds
The Bank of Zambia sold the kwacha equivalent on USD85million in treasury bills in last Thursdays auction.
On offer was K950million of which appetite in bids totalled K879million. Of this K769million was absorbed representing a bid cover ratio of 1.14. Real yields on kwacha treasury bills widened further in Thursdays auction as returns rose 145bps from the 1 – year to 20.5001% and 150bps for the 91 – day assets to 14.5%.
Yields remain attractive given the current inflation rate of 8.1%.
The one-year paper is earning a similar return as 5 -year money at 20.4%. This makes investing in kwacha bonds very unattractive because shorter durations will earn investors a better or similar return.
Next auction will be held on 13 september.
Treasury bill yields as extracted from Bank of Zambia website.