Thursday’s Treasury bill (T/bill) auction received K544 million in bids with K449 million being allocated:
The auction was undersubscribed by 40% which was an improvement on the April 16 auction which only attracted K281.3 million in bids (69% undersubscribed). The 364 days instrument attracted the most capital and was oversubscribed by 21%.
Yields continued to rise with the 273 days bill breaching the 20% mark and the 364 days bill hitting a high of 23.25%:
The moves were driven by recent news that the reversal of the 2015 mining tax regime could blow a hole of as much as K2.3 billion in the 2015 national budget. No language has been issued yet by the Government on potential spending cuts or additional borrowing to make up for the shortfall. The latest IMF article IV consultation revealed other fiscal pressures being faced by the Government from fuel and agriculture subsidies, pension deficits as well as road construction.
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *