FINANCIAL MARKETS DEPARTMENT

WEEKLY FINANCIAL MARKET DEVELOPMENTS

(15 - 19 NOVEMBER 2021)

Main Highlights lowest since early October, after earlier

rising to a high of US$82.24 a barrel.
Gross official foreign exchange reserves
increased by US$1.0 million to close the The gross official FX reserves marginally
review week at US$395.46 million (1.58 increased by about US$1.0 million to close the
months of imports). review period at US$395.46 million (1.58
months of imports). This is opposed to US$7.7
The Kwacha maintained the gradual loss in
million decline recorded during the preceding
value against the US dollar in November
week.
2021 but has since recorded net gains
against other currencies of major trading
partners. The Kwacha closed at K823.2683
per US dollar on 19th November 2021.

Liquidity conditions in the domestic money

market remain very tight with daily average
commercial banks’ excess reserves, before
borrowing from the central bank, averaging
negative K99.5 billion per day during the
review week.

Treasury securities primary auctions

continue to be considerably under-
subscribed and under-allotted. The
cumulative allotment to planned issuance
ratio in 2021/22 fiscal year has actually
declined to 42.84% from 47.49% recorded
by mid-October 2021.
Supply in the FX retail market continues to
lag demand as seasonally expected. ADBs
purchased a total of US$22.37 million from the
market during the review week from US$26.47
million registered during the previous week.

Oil prices dropped below US$80 per barrel

on European COVID concerns. Brent oil
prices fell 3.4% to US$78.40 a barrel, its
1

The Kwacha maintains a gradual loss in value
against the US dollar in November 2021, in
process losing 0.06% (46 tambala) during the
review period and 0.23% (K1.93) during the first
three weeks of the month.
However, the Kwacha has recorded net gains
against other currencies of major trading
partners during the month. The Kwacha lost
2.22% (K25.99) against the British Pound
during the review week to moderately counter
the cumulative gain of 2.34% (K27.90) recorded
during the first two weeks of November 2021.
During the same review week, the Kwacha
gained 1.73% (K18.12) and 0.63% (37 tambala)
against the Euro and South African Rand,
respectively, to bring the cumulative gain
against the Euro in November 2021 to 1.06%
(11.05) and against the Rand to 0.48% (28
tambala).
Liquidity conditions in the domestic money
market remained very tight as captured by
daily average commercial banks’ excess
reserves, before borrowing from the central
bank, which stood at negative K99.5 billion from
negative K94.5 billion observed during the week
ended 12th November 2021. The further
tightening of liquidity conditions reduced
loanable funds in the interbank market and
increased commercial banks borrowing from the
central bank. Consequently, interbank traded
volume decreased to K14.8 billion per day from
K22.7 billion per day recorded during the
preceding week while access on the Lombard
facility increased to K106.8 billion per day from
K105.9 billion per day.
The IBR remains firm and closely aligned to
the policy rate at 11.98 percent. Thus, the IBR
continues to be within the target corridor of
+0.2/-4.0 percentage points around the policy
rate.
2
 Treasury securities primary auctions
continue to be considerably under-subscribed
and under-allotted. A total of K3.7 billion was
subscribed and fully allotted on Treasury bills
primary market against planned issuance of
K17.0 billion. This represents an allotment to
planned issuance ratio of 21.58%. The foregoing
reduced cumulative Treasury securities
allotment to planned issuance ratio in 2021/22
fiscal year to 42.84% from 43.44% while
increasing allotment to subscription ratio to
88.00% from 87.86%.
Total central bank operations with the
commercial banks were contractionary
during the review week, withdrawing a net of
about K2.4 billion from the banking system.
Net maturity of Treasury securities and
commercial banks customer deposits transferred
to the central bank representing liquidity
injections into the banking system at K2.4
billion and K4.9 billion, respectively, were fully
countered by withdrawals from net revenue
collection by Government at K7.2 billion, net
central bank foreign exchange operations at K49
million, and net central bank open market
operations at K2.3 billion. Oil prices dropped below US$80 per barrel on
European COVID concerns. Brent oil prices
dropped 3.4% to US$78.40 a barrel, its lowest
since early October, after earlier rising to a high
of US$82.24 a barrel.