The Central Bank in Africa’s copper producer, Zambia, issued government paper worth K413 million ($35 million equivalent) in Thursday 22 Nov. treasury bill sale. The fortnight auction 43% underwater but recorded a bid cover of 55%.
Strong appetite was observed in the 1-year tenor with K621 million in bids of the total K658 million accounting for 94% of the market appetite. Of these only K509 million were absorbed (in nominal terms) representing 98% of the total allocation (based on cash amounts paid.
The primary interest rate curve edged higher 9bps to 23.15555% while midway in the 6 months and 9 months eased 100bps and 51bps to 14.000% and 20.9916% respectively.
Secondary market pricing inferred from the forward exchange rate curve has revealed a narrower spread of 150bps above the current primary t-bill pricing.
This auction comes a day after the Bank of Zambia held the benchmark interest rate at 9.75% after weighing risks to the economy versus the need for economic stimulus.
