Zimbabwe: RBZ TBs raise $ 550 million


The Reserve Bank of Zimbabwe (RBZ) raised $ 550 million through the latest Treasury bill (TB) issue last week after issuing a one-year paper to raise $ 1 billion.

In a previous issue that also aimed to raise $ 1 billion, the central bank raised $ 650 million. Full underwriting for one of these recent issues is said to have seen the biggest increase since tax authorities imposed a moratorium on Treasury bill issues in 2018. The Treasury has indicated its intention to raise $ 30 billion through the government. 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 public treasury and payable at face value after a particular maturity period, often a year at most.

A stable macroeconomic environment – aided by fiscal prudence and the RBZ-based currency auction system – has improved the market’s appetite for government papers in recent months after declining demand due to rising inflation in the past. And the authorities’ tendency to issue TBs can be attributed to current budget constraints due to 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 awarded in full on average.

In recent issues, RBZ has been limited to one year – 365 days – of paper, although the issue trend has been a combination of 180-day, 270-day, and 365-day paper, while the duration of bond maturity ranges from two years to 10 years.

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