Government bonds oversubscribed, as January offer attracts K2.7bn

The January auction of government bonds has been oversubscribed, with returns hitting K2.7 billion against an offer of K2.6 billion.

Bank of Zambia (BoZ) held an auction of government bonds on Friday, January 20, 2023 looking to raise K2.6 billion.

According to ABSA Zambia market update, the government bonds were oversubscribed by 7. 5 percent with bids of K2.7 billion against an offer of K2.6 billion.

It stated that the yields rates on the 10 year bond slightly increased by 0.11 percent while the other tenors stayed flat.

Read more :Currency Watch: Kwacha stays down at 18:15 against the dollar

“The Bank of Zambia wishes to announce to the general public that the auction sizes for the first quarter of 2023 will be K2,000 million for Treasury bills and K2,600 million for Government bonds,” it indicated.

On the money market, the report indicated that the volumes of funds traded on the interbank in Friday’s session reduced to K485 million from K875 million, with the weighted overnight interbank rate dropping from 9.38 percent to 8.94 percent.

It indicated that the liquidity levels in the market moved upwards from K3,397.21 million to K3,487.42 million seen in the previous session.

On the Kwacha, the local currency traded on the backfoot against the United States (US) dollar on Friday as strong greenback demand from large importers and manufacturers continued to outstrip the already thin inflows.

At 08:30 hours, commercial banks quoted the local unit at K18,550/18.600 per dollar, five ngwee weaker than its previous days close of K18.500/18.550 and it traded at these levels until business close.

“As we start a new week and in the short term, we anticipate the local unit keep posting small losses on sustained corporate dollar appetite,” it stated.