The Reserve Bank of Zimbabwe (RBZ) raised $1,1 billion in the latest Treasury Bills (TBs) issuance, which was held last Friday.
The monetary authorities were seeking $870 million, but bids totalled $1,15 billion. This oversubscription shows the market’s growing confidence in the Government paper, as declining inflation has worked to improve yields.
Funds being raised through the TB issuances are aimed at financing Government projects in line with the 2021 National Budget that 3 percent of the money will be sourced from the market.
TBs are short-term financial instruments issued by the Government Treasury to be paid at par-value after a particular maturity period, often a maximum of a year.
A stable macro-economic environment has seen market appetite for Government paper improving in recent months.And the authorities’ leaning towards TB issuances can also be attributed to present budgetary constraints on the back of limited external credit support.
The TBs, which were allotted on July 9, raised $1,1 billion — one of the biggest raises so far this year — at an average coupon rate of 19,2045 percent.
Unlike in previous years, where TB issuances were almost excessive, the current ones have been planned for.Meanwhile, the Ministry of Finance and Economic Development has announced an issue calendar for the period July 2021 to September 2021 as it seeks to
“improve market transparency in the issuance of Government securities.”
Over the indicated three-month period, Treasury is looking to raise $15 billion through 270-days, 365-days and 730-days Treasury Bills (TBs).
The 270-days paper will account for $5,1 billion, while 365-days and 730-days paper will account for $4,63 billion and $4,65 billion, respectively.
“The calendar takes into consideration of market developments and debt management objective of lengthening the maturity profile of domestic public debt instruments,”
said the Ministry of Finance and Economic Development in a statement.
Earlier this year, the authorities indicated plans to raise $30 billion through the issuance of Treasury Bills and bonds to finance its 2021 budget deficit.
Treasury bonds and Treasury Bills are all Government-issued fixed income securities that are deemed safe and secure.
According to the Government debt plan for 2021, the auctions will now be held every Thursday with 80 percent of the money expected to be raised from the Treasury bills while the remainder from Treasury Bonds.