LUSAKA (The Business Telegraph): With liquidity north K5.9billion, Zambia’s central bank sold K1.95billion worth of treasury bills. Of the K1.3billion worth of assets on offer, appetite recorded was in excess of K3.0billion of which 62% was for one year paper. Treasury bills have continued to outperform bonds as the risk skew theme remains towards shorter dated higher yielding assets given rising COVID induced credit risks.
Of the two yards sold in cash terms just over a billion was housed in the 1-year tenor paying 24.5% which was a 91bps rally from a fortnight ago levels. Other tenors sought were the 6-month housing K428.9million at 17.0%. Yields continue to compress with the 9-month rate ebbing 150bps to 20.0% as the 3-months paying 50bps lower at 14.0% which is 150bps below an inflation of 15.5%.
Despite the short end of the kwacha yield curve easing in trajectory, bond yield remains elevated between 25-33%.
The Kwacha Arbitrageur