With only K453million market liquidity into Wednesday 23 October K950million sale treasury bill sale, it is highly unlikely that the central bank in Africa’s red metal producer will absorb all assets on offer. Markets have been cash tight after K704million bond purchases settled earlier on Monday mopping the balance post K2billion absorbed in provisional taxes earlier. This auction follows an earlier hat-trick of back to back over-subscriptions in t-bill sales and a decently covered one yard bond sale.
The Kwacha demand curve has limited latitude for yields to ebb higher given the already elevated position. The last primaries printed between 16.5% to 27.5% in the 3 month to 1 year bucket respectively.
Kwacha markets will be closed for business on Thursday (24) and Friday (25) October as Zambia celebrates 55 years of independence.
The Kwacha Arbitrageur