Currency to hold firm
This week the kwacha is expected to hold firm within 11.75-11.85 trading range with support from corporate conversions to fund kwacha tax and salary obligations. Mild dollar demand from retailers will arise on specific days but will be offset by kwacha demand for tax and other local currency obligations.
BOZ to hold the monetary policy rate (MPR) at 9.75%
BOZ will have its rate decision meeting deliberations starting Monday 19 Nov through to Tuesday 20 Nov. with the final announcement on Wednesday 22 Nov. We forecast that the committee will keep rates unchanged at current levels.
T-bill yields to rise
in the Thursday 22 Nov. treasury bill auction, yields for the 9 months and 1-year are expected to rise no more than 50bps. Given the level of sovereign risk market players are bidding with a premium above current primaries to realign the curve. Appetite is expected to gravitate around the 1-year which is the highest yielding asset. the treasury auction is expected to be under- subscribed given market liquidity conditions.
******edited by Chief Market Analyst*****
