BoZ treasury bill auction undersubscribed amid weaker investor demand

The Bank of Zambia (BoZ) treasury bill auction held last week recorded a sharp undersubscription, with bids amounting to K1.04 billion against a target of K2.2 billion.

According to results from the central bank’s Financial Markets Department for Treasury Bill Tender No. 21/2025, only K928.75 million (at cost) was accepted from successful bidders, reflecting subdued investor appetite for government securities during the period under review.

In the 364-day tenor, the BoZ offered K730 million, received bids totalling K525.91 million, and accepted K525.04 million.

For the 273-day tenor, bids stood at K325.13 million against an offer of K530 million.

Meanwhile, the 182-day tenor attracted bids worth K56.83 million from an offer of K500 million, with K53.43 million awarded.

The 91-day tenor received bids of K25.15 million from a total offer of K440 million.

The treasury bill market remains an essential platform for the Government’s short-term borrowing and a key tool for BoZ’s liquidity management within the financial system.

The lower uptake is seen as a reflection of cautious investor sentiment amid tighter monetary conditions.

On the money market, Absa Bank Zambia reported that interbank trading volumes declined to K1.19 billion on Friday from K1.39 billion a day earlier, while the weighted overnight interbank rate remained unchanged at 14.50 percent.

Market liquidity, however, rose to K2.13 billion from K1.94 billion.
Meanwhile, on the commodities market, copper prices posted modest gains as stronger-than-expected industrial output in China bolstered confidence despite slower overall economic growth.

The most-active copper contract on the Shanghai Futures Exchange climbed 1.26 percent to 85,790 yuan (US$12,041.88) per metric tonne, while the three-month benchmark on the London Metal Exchange (LME) advanced 1.06 percent to US$10,717 per tonne.

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