Gvt Issues ZWL$ 500 Million TBs To Finance Covid-19 Fight

Government has issued a Treasury Bill (TBs) tender amounting to ZWL$ 500 million to local banks and building societies with a 270 and 364 day tenure as authorities seek to raise resources to meet Covid-19 pandemic expenditure.

The pandemic has come at a time government finances are squeezed, and has put the economy in great need of businesses bailout.

The offer will take place tomorrow, Friday the 3rd of July with allotment and payments of successful bidders made the same day.

“The Reserve Bank of Zimbabwe (RBZ) on behalf of the Government of Zimbabwe hereby invites Commercial banks, Building Societies, POSB and IDBZ to subscribe to Government Treasury Bill Tender amounting to Five Hundred million dollars (ZWL$500,000,000-00),”

“Applications must be for a minimum amount of One million Zimbabwe dollars (ZWL$1,000,000-00). The number of bids per investor is restricted to two (2) per issue and copies of the application forms are available from RBZ Local Dealers, 80 Samora Machel Avenue, Harare. Applications should be clearly Zimbabwe Government 270-Day and 364-day Treasury,” the Central Bank said in a statement.

Features of the Bills will include a prescribed asset status, liquid asset status, tradability, tax exemption, acceptance as collateral for overnight accommodation by the RBZ and allotment given at a weighted average rate.

Cash-strapped Zimbabwean government is facing an enormous task of mobilizing funds domestically to meet its expenditure and also hedge the economy against the effects of Covid-19 pandemic as external credit support remains elusive.

Zimbabwe recently announced a ZWL$ 18 billion business rescue package which is to be financed by domestic borrowing.

Recently, the International Monetary Fund (IMF) excluded Zimbabwe from the immediate debt service relief for 19 African countries to enable them to channel financial resources towards dealing with the coronavirus pandemic due a tainted debt pedigree with the Bretton wood institution.

Hence Government in recent years has relied on TBs and the RBZ’s overdraft facility to fund its expenditure, a development that has increased domestic debt.

Since re-introducing the TB auction system in July last year, Government had raised ZWL$1.7 billion by close of year.

 

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