Central Bank in Africa’s second largest copper hotspot, Zambia on 14 March sold K746 million (circa. USD$83.3 million) worth of short dated government securities. Eighty percent (80%) of bids totaling K909 million were absorbed. The auction was heavily skewed in to the 1 year that was priced at 23.57% with 22.5% accounting for K205 million was in the 9 months tenor at 23%. The term structure of interest rates was unchanged from last auction.
With a billion Kwacha in aggregate interbank current account balance, liquidity skews in the hands of very few banks continues to characterize the Zambia money markets.
The markets may appear cash flush but this liquidity resides in a handful of banks with little appetite for government securities, A Money Markets Trader at an unnamed commercial bank said.
Thursday 14 March debt sale widens the funding gap by K163 million to just under K2 billion.
