RBZ seeks to raise $60m through TBs

20 Aug, 2019 - 00:08 0 Views
RBZ seeks to raise $60m through TBs RBZ

The Chronicle

Oliver Kazunga, Senior Business Reporter

THE Reserve Bank of Zimbabwe (RBZ) is seeking to raise $60 million to finance Government programmes through the issuance of Treasury Bills. 

Treasury Bills (TBs) are negotiable instruments issued by Government through the Reserve Bank to finance the State’s short-term requirements.

In a notice yesterday, the Central Bank said it was inviting financial institutions to subscribe to Treasury Bills (TBs) amounting to $60 million.

“RBZ hereby invites financial institutions including commercial banks, building societies, People’s Own Savings Bank, asset management companies, insurance and pension funds and other corporates to subscribe to TBs amounting to $60 million.

“Applicants 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, 80 Samora Machel Avenue, Harare,” it said.

The offer for the debt instrument opened yesterday.

RBZ said the TBs, which will be allotted to successful bidders this Thursday, have special features including prescribed and liquid asset status, tax exemption and acceptability as collateral for overnight accommodation at the Central Bank.

Last month, the Central Bank issued TBs worth $30 million through an auction system to finance Government programmes and this was the Government’s first auction after Treasury in 2018 moved to sanitise the issuance of the debt instrument by reverting to an auction system.

The raising of funding by Government through the auctioning of TBs was last carried out in 2012. 

In July, the Government carried out a TB auction and at a recent post mid-term                       budget breakfast meeting in Bulawayo, Finance and Economic Development Minister    Professor Mthuli Ncube said they issued the TBs to test the market and map out the yield curve.

TBs have varying maturities, and the “test” TBs had 91-day, 182-day and 365-day maturities at interest rates of 16,5 percent, 19,6 percent and 17 percent, respectively. 

In 2018, Treasury placed a suspension on the issuance of TBs, as there were concerns that the market had become flooded.

Figures provided by the RBZ put total issued TBs at US$6,3 billion of which US$1 billion were issued for the Zimbabwe Asset Management Company (Zamco) to purchase non-performing loans. — @okazunga

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