Type to search

Business News

RBZ third batch of TBs oversubscribed


Harare, (New Ziana) – The Reserve Bank of Zimbabwe (RBZ) said on Friday it got offers four times more than the $100 million it sought to raise through treasury bills (TBs), signalling high investor appetite in the paper.

The central bank was in the market on Wednesday with the third batch of TBs in two months as it continues to raise funding for government operations.

Out of the $100 million it sought to raise via the 92-day treasury bills, the RBZ in results of the offer, said total bids amounted to $419 million.

The bills, which had an “open tender on yield basis” interest rate, had other special features which include prescribed and liquid asset status, tax exemption and acceptability as collateral for overnight accommodation at the RBZ.

The RBZ said it allotted $102 million out of the funds on offer, with the highest interest rate that was offered being 25 percent, while 12 percent was the lowest.

The average rate was 13.6765 percent.

The offer, which opened on Wednesday and closed on Thursday, was open to financial institutions including commercial banks, building societies, the POSB, IDBZ, insurance and pension funds and other corporates for subscription.

Investment per investor was however restricted to a maximum of two applications, of a minimum $1 million each.

Treasury bills are considered one of the safest forms of investment in the world as they are issued and backed by governments with little risk of default when it comes to payment on maturity.

Issuance of TBs had become a highly controversial issue in the previous administration as the government raked up billions in debt through the instrument as well as a central bank overdraft facility to bridge its budget deficit.
New Ziana


You Might also Like

Leave a Comment

Next Up