Fri, 24 Feb 2017 10:01:56 +0000
By BUUMBA CHIMBULU
NON-RESIDENT investor’s holding of Government securities in the fourth quarter of 2016 increased by K3.7 billion, an indication that investors still have confidence in the Zambian economy, the Bank of Zambia (BoZ) has revealed.
The Central Bank also announced that foreign reserves as at December 2016 stood at K2.4 billion.
BoZ governor Denny Kalyalya explained that non-resident investor’s holding of Government securities in the quarter under review increased to K6.6 billion from K2.9 billion, representing an increase of K3.7 billion.
“They are investing in bonds which are longer investments. To us, this signifies that they are seeing better prospects going up and it implies that they could be of the view that the current high yields rates could be coming down,” he said.
He was speaking at a media briefing in Lusaka when he announced the monetary policy rate for the 2016 fourth quarter.
“We have a higher stock in terms of Government securities, it is a two way thing, and this means that Government debt has gone up despite raising some money so that is something to look out for.
“These are non-resident investors who are coming into our market, these started investing in bonds so you can see that literally all their holdings are invested in bonds,” he said.
Dr. Kalyalya said the increase in the Government securities signified that Government would collect enough revenue for its operations.
He explained that non-resident investors in the Government markets also brought in foreign exchange.
Dr. Kalyalya said that had important implications, one them was that proceeds were brought to Government for the operations once they matured.
“These non-residents also bring in Dollars to buy our securities which are denominated in Kwacha, so part of the supply in foreign exchange that we see come through this channel,” he said.
