ZAMBIAN CURRENCY FALLS AT FOREIGN EXCHANGE AUCTION

  The Zambian currency further depreciated
  yesterday at the second auction since the introduction of a
  two-tier foreign exchange system last month.
      The (central) Bank of Zambia said the kwacha was pegged at
  16.99 to the dollar, compared to last week"s rate of 15 to the
  dollar.
      The bank, which offered six mln dlrs at the auction,
  reported demand for 13.4 mln dlrs. At the previous auction, the
  government offered eight mln dlrs.
      Last month the government set a fixed exchange rate of nine
  kwacha per dollar, subject to adjustment against a basket of
  five currencies, for certain official transactions.
      It also introduced a new weekly foreign exchange auction
  only for parastatal organisations and the private sector, where
  the exchange rate is allowed to float in accordance with market
  demand.
      The new auction system is designed to be more restrictive
  than the previous one, suspended in January after the central
  bank fell 10 weeks in arrears to successful bidders.
      Under the new system, no bidder, except the the state oil
  company Zimoil and the national airline Zambia Airways, is
  allowed to bid for more than five pct of the foreign exchange
  on offer.
  

