Central bank cuts tender sizes for government securities

February 4, 2016 8:02 AM

The World Bank warned that Zambia will require tough action in 2016 to curb runaway expenditure, double-digit inflation and growing twin deficits.

A man displays a 50,000 Kwacha note in Lusaka January 23, 2012. REUTERS/Mackson Wasamunu

Zambia has almost halved the tender sizes for government securities starting on Thursday as the southern African state reduces borrowing, the central bank said in a statement posted on its website.

The tender sizes had been reduced to 450 million Zambian kwacha ($40 million) from 900 million kwacha and to 600 million kwacha from 1,000 million kwacha for government bonds per auction, the central bank said.

The World Bank warned that Zambia will require tough action in 2016 to curb runaway expenditure, double-digit inflation and growing twin deficits.

"They want to send a strong signal to the market that they want to reduce domestic borrowing," said economist Lubinda Habazoka of Zambia's Copperbelt University.

($1 = 11.2500 Zambian kwachas)