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Tawanda Musarurwa 

The Reserve Bank of Zimbabwe (RBZ) raised $550 million through the latest Treasury Bills (TBs) issuance last week after it issued a one-year paper targeted to raise $1 billion.

In a previous issue that was also targeted to raise $1 billion, the central bank raised $650 million. Full subscription to any of these recent issuances would have seen the biggest raise since the fiscal authorities placed a moratorium on treasury bill issuances in 2018.  Treasury has indicated plans to raise $30 billion through the issuance of Treasury Bills and bonds to finance more Government projects in line with the 2021 National Budget.   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 — fostered by fiscal prudence and the RBZ-driven foreign currency auction system — has seen improving market appetite for Government paper improving in recent months after demand had waned due to rising inflation in the past. And the authorities’ leaning towards TB issuances can be attributed to present budgetary constraints on the back of limited external credit support.

The latest TBs, which were issued on July 1, raised $550 million at an average rate of 20,8182 percent.   The lowest rate was 20,5 percent, and the highest rate was 21 percent.

All bids were allotted in full at average.

In recent issuances, the RBZ has kept to one year – 365 days — paper, although the trend in issuances has consisted of a combination of 180 day, 270 day and 365 day paper, while maturity period for the bonds ranges from two years to 10 years .