BoZ in treasury bill boost

BUUMBA CHIMBULU writes @SunZambian THE Bank of Zambia (BoZ) sold K1.793 million (US$84.2 million) worth of treasury bills in the debut sale of 2021 held this month. The auction sale which held on Thursday last week, earned the Central Bank K1, 793 million. Given an appetite in excess of two yards in Kwacha terms, the […]

BoZ in treasury bill boost
BUUMBA CHIMBULU writes @SunZambian THE Bank of Zambia (BoZ) sold K1.793 million (US$84.2 million) worth of treasury bills in the debut sale of 2021 held this month. The auction sale which held on Thursday last week, earned the Central Bank K1, 793 million. Given an appetite in excess of two yards in Kwacha terms, the Central Bank was able to absorb 81.7 percent of demand given a market liquidity position of K1.3 billion with maturities in the pipe line. According to the Kwacha Arbitrageur, the Central Bank had K1.3 billion assets on offer. “The highest market appetite was observed in the one year tenor of K1.83 billion of which K1.45 billion was locked in at 25.75 percent, the most lucrative point on the yield curve. “Other tenors saw infinitesimal demand save the 6months tenor absorbed K176.3 million,” the Kwacha Arbitrageur said. The magazine said with a rising inflation trajectory at 19.2 percent for December 2020 as reported by the Zambia Statistics Agency, the term structure of interest rates remained underwater (below inflation) save the one year priced at 655 basis points above consumer price index. In indicated that negative premiums (yields less inflation) were making assets unattractive. “With elevated sovereign risks, it is forecast that treasury bills will outperform bonds this year given an array of factors spelling uncertainty,” the magazine said.