Govt seek $5 million for COVID-19 fight 

Source: Govt seek $5 million for COVID-19 fight – NewsDay Zimbabwe

GOVERNMENT is seeking to raise $500 million through Treasury Bills (TBs) to meet the COVID-19 pandemic expenditure, the Reserve Bank of Zimbabwe has said.

BY FIDELITY MHLANGA

The apex bank has invited banks and building societies to subscribe to the sovereign paper with 270 and 364-day tenures of maturity.

“The Reserve Bank of Zimbabwe (RBZ) on behalf of the Government of Zimbabwe hereby invites commercial banks, building societies, POSB and IDBZ [Infrastructure Development Bank of Zimbabwe] to subscribe to a Government Treasury Bill Tender amounting to $500 000 000,” the central bank announced yesterday in statement.

The paper is an open tender on a yield basis

Applications must be for a minimum amount of $1 million and the number of bids per investor is restricted to two per issue.

The tradable paper is tax exempted, has a prescribed asset status and can be accepted as collateral for overnight accommodation by the central bank.

Research shows that although TBs are considered to have very low free credit risk, they are affected by interest rate and inflation vagaries.

Previous over-issuance of TBs created a fiscal imbalance that threatened the financial sector as well as distortions in the foreign exchange market.

Authorities resumed public auction of TBs last August, with prior auctions held in secrecy. Government has since instituted open market borrowing to improve transparency.

According to the Transitional Stabilisation Programme, government would only be issuing medium to long-term securities in view of the limited fiscal space, categorised as liquidity support, infrastructure development among other purposes

COMMENTS

WORDPRESS: 1
  • comment-avatar
    Dr Ace Mukadota PhD 5 months ago

    Headline 5 million and story 500 million – we talking USD here or funny money comrades ?
    In February 2019 – 5 million USD was equal to 5 million mabondis ( for some lucky ZANUvirsPF chefs at the RBOZ)
    The circus rolls on and on and on ……..