IMF supports eurobond plan

The International Monetary Fund (IMF) has backed plans by Zambia to sell a second eurobond even as yields on existing debt have surged to a record. “Given Zambia’s relatively modest overall debt level, strong economic growth and large investment needs, a sizeable eurobond issuance would make sense,” Tobias Rasmussen, the IMF’s resident representative for the country, said at the weekend. The proviso was that market conditions were favourable and the proceeds were invested in projects that would support the economy, he said. – Bloomberg


Interbank rate spikes to 18%

The Nigerian interbank lending rate spiked 7.75 percentage points to 18 percent for overnight placement yesterday. The move was ahead of the central bank’s withdrawal of about 750 billion naira (R51bn) to enforce a new cash reserve rule on public sector deposits. Two weeks ago Nigeria’s central bank raised cash reserve requirements for banks to hold government sector deposits to 75 percent, from 50 percent, in a bid to tighten liquidity and support the weakening currency. Dealers said fund providers were quoting higher rates yesterday because they were expecting the central bank to tighten liquidity before the market close. The overnight placement rate was 10.25 percent the previous day. “Rates have suddenly jumped because of the signal… to debit banks’ accounts, though the money is yet to be debited,” one dealer said. – Reuters


Bank acts to slow cedi’s fall

Ghana’s central bank had tightened rules yesterday on the operation of accounts denominated in foreign currency in a bid to stem currency depreciation, bank governor Henry Kofi Wampah said. The new measures, to be implemented immediately, require foreign exchange purchased for the settlement of import bills to be lodged in a special margin account that must be drawn within 30 days, according to details of the regulations. In addition, the bank has scrapped transfers between accounts denominated in a foreign currency. It also directed that proceeds from exports should be converted into the cedi currency within five working days. – Reuters