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Oliver Kazunga, Senior Business Reporter

THE Reserve Bank of Zimbabwe (RBZ) yesterday turned to the market for the first time this year seeking to raise $200 million to finance Government programmes through the issuance of a 272-day Treasury Bill.

Last year, the Government issued through an auction system Treasury Bills worth over $1,5 billion. Treasury Bills (TBs) are negotiable instruments issued by Government through the central bank to finance the State’s short-term requirements.

In a public notice yesterday, RBZ announced that on behalf of the Government it was inviting through an auction system local banks to subscribe to the TB tender seeking to raise $200 million.

“RBZ on behalf of the Government of Zimbabwe hereby invites commercial banks, building societies, POSB (People’s Own Savings Bank) and IDBZ (Infrastructural Development Bank of Zimbabwe) to subscribe to Government Treasury Bill Tender amounting to $200 million,” said the Central Bank.

The TBs, which will be allotted to successful bidders today, have special features including prescribed asset status, liquid asset status, tax exemption and acceptability as collateral for overnight accommodation at the central bank. The interest rate on the latest TBs is calculated at an ‘open tender’ on a yield basis.

“Applications must be for a minimum amount of $1 million. The number of bids per investor is restricted to two and copies of the application forms are available from RBZ local dealers,” it said, adding that the applications should be clearly marked ‘Zimbabwe Government 272-Treasury Bills’. The market’s strong appetite for the debt instrument has been increasing as Treasury seeks to raise funding to support Government operations amid concerns of lack of external credit support to meet Zimbabwe’s budgetary needs.

Economic analysts have attributed the issuance of TBs to budgetary constraints and the only source of raising funding for Government to finance its programme was floating the debt instruments. In the past, RBZ has floated TBs targeting banks, asset managers, insurance, pension funds and other corporates. Some players in the market have subscribed to the debt instruments from Government as they feel more comfortable and secure in buying the paper bonds by the central government unlike going to a private company for a placement. — @okazunga