The central bank in Africa’s second largest copper hub, the Bank of Zambia (BOZ), on 06 June sold K725.39 million worth of treasury bills in a debt sale that saw one (1) year yields edge higher 25 bps to a record 26.50%.
Bid cover ratio was 1.26 of the K916.12 million in total bids received. Ninety eight and half percent (98.5%) of the auction allocation was housed in the one (1) year tenor amounting to K714.60 million of the K903.43 million in bids.
Kwacha yields on government securities remain elevated across the entire yield curve as markets reflect credit risks given the fiscal posture of the sovereign. Moody’s rating agency on 23 May downgraded Zambia’s credit rating to Caa2 with negative outlook from Caa1 with stable outlook a year earlier citing rising debt and fiscal risks weighing growth prospects.
Other moves observed were in the 3 month bucket that edged higher 50 bps to 16.495%.
