Business

Treasury Bills oversubscribed

Zanaco building.

TRYNESS TEMBO, Lusaka
THE fortnightly Bank of Zambia (BoZ) treasury bills auction was last week, attracting total bids amounting to K841.53 million against an offer of K630million due the huge interest from investors.
Meanwhile, the Kwacha is expected to trade in a tight band this week with a weak bias on the back of lower supply for the United States (US) dollars as month-end flows dry out.
Zanaco says a total of K696.12 million was allocated as yields rates on 91 and 273 days remained unchanged while the 182-day rate dropped to 23.50 percent from 24 percent and the 364-day rate went up to 24.99 percent from 24.50 percent.
“Government treasury bills auction was over-subscribed, receiving bids amounting to K841.53 million while K696.12 million was allocated,” the bank says in its daily treasury newsletter.
On the local unit, the bank says it is anticipated to trade between K9.80 and K9.90 in the short term.
On Thursday, the Kwacha declined marginally against the dollar due to a subdued greenback demand by corporate and interbank trades, with expectation it could strengthen in the short term.
Demand for the local currency trailed demand for the greenback on the day with the Kwacha losing two ngwee from an open of K9.78 and K9.83 to close at K9.80 and K9.85 on the bid and offer respectively.
First National Bank (FNB) Zambia, however, says the Kwacha is still getting support from companies that are still making conversions for their tax obligations.
The local unit is also expected to receive support from provisional taxes for third quarter due by October 14, 2016, and unless there is a sharp uptick in demand, it is unlikely that it will get to K10.00 before the date.
Cavmont Bank also says the Kwacha closed trading on Thursday at K9.85 and K9.90, K0.1 weaker than the day’s opening rate.



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