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Oliver Kazunga, Senior Business Reporter
THE $500 million Treasury Bills issued last week by the Reserve Bank of Zimbabwe (RBZ) to fund Covid-19 pandemic expenditure by Government have been under-subscribed.

The apex bank went on the market seeking to raise $500 million to fund public expenditure related to the fight against Covid-19 pandemic.

The pandemic was first detected in China last year in December and has spread across the world killing hundreds of thousands of people while at the same time causing economic stagnation as countries battle to fight its spread.

At the weekend the central bank indicated that total bids for the TBs tender amounted to only $170 million.

Commenting on the results yesterday, financial market analyst, Mr George Nhepera said:

“The results reflect that the RBZ TBs issue was undersubscribed.

“It shows that on offer the RBZ got total bids amounting to $170 million, and only allotted $70 million, entirely for the 270-day period.

“It could be a market signal that either investors are less keen to place their funds in the instrument or there could be less liquidity available in the market to support the huge funding request by Government of $500 million.

“Nevertheless, the monetary authorities, on such results of TBs auctions usually have the best plausible explanation as to why this could be taking place and what remains then of any other alternative options to raise the required amount, going forward.”

The RBZ had invited bidders from the financial services sector to subscribe to the tender.

The TBs had special features including prescribed asset status, liquid asset status, tax exemption and acceptability as collateral for overnight accommodation at the central bank.

Allotment was at weighted average rate while interest rate on the TBs was calculated at an ‘open tender’ on a yield basis. Applications were for a minimum amount of $1 million. — @okazunga