Record Bond Yields Attract Investors to Zambia A rally in Zambia’s kwacha, the world’s second-best performing currency this month, and record high yields are attracting foreign investors back to the nation’s Treasury bills, according to a report published by Bloomberg. The Bank of Zambia sold 475 million kwacha ($76 million) of securities yesterday after getting 603 million kwacha in bids, the first time demand exceeded supply since Feb. 20, according to data compiled by Bloomberg. Yields on 364-day bills rose to 19.99 percent, the highest since Bloomberg began compiling data in 2005, with the sale luring mostly international investors, the Lusaka-based central bank said in an e-mailed statement. Zambia’s kwacha gained 9.6 percent in June, the most in the world after Papa New Guinea’s kina, paring losses for 2014 to 12 percent. Zambia agreed to start talks with the IMF on a program to contain its budget deficit, which may include a loan, the government said a week ago. The central bank has raised interest rates to a record to support the currency and tame inflation, while boosting overnight rates and ordering reserves be set aside for accounts held abroad to clamp down on speculators. “The central bank have talked down fears regarding the currency of late and also their expectations of the fiscal deficit,” Nema Ramkhelawan-Bhana, an Africa analyst at Rand Merchant Bank, said today by phone from Johannesburg. “That perhaps has shored up confidence.” zambiareports/2014/06/13/record-bond-yields-attract-investors-zambia/ Source: Bloomberg
Posted on: Fri, 13 Jun 2014 17:25:50 +0000
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