HomeBusiness DigestGovt's TBs fail to raise $500b

Govt’s TBs fail to raise $500b

Godfrey Marawanyika

GOVERNMENT hopes of raising $500 billion through Treasury Bills (TB) over the past two months have failed to raise the required amount.

, Helvetica, sans-serif”>On April 14, government floated a $250 billion TB which had a 150% interest but only raised $89,5 billion.

In May government floated another $250 billion TB but again the market did not respond as expected.

The government only managed to raise $95 billion.

Government says the purpose of floating the bills was largely to help finance its requirements including the conversion of short-term into long-term debt.

Analysts this week said although government continued to float the TBs this had failed to mop up the excess liquidity on the market.

“The two TBs failed to get positive response from the market largely because a number of investors were avoiding the concentration of risk,” said an investment analyst.

“Because of the country’s debt problem what the authorities are trying to do is to convert short term debt into long term debt so as to ease pressure on their payment methods. But so far the TBs have failed to mop up the excessive cash in the market.”

Since last week the market has been recording daily average surpluses of more than $120 billion largely due to the high volumes of the TBs.

By the end of this month, the TBs are expected to release at least $2 trillion, into the market, chief economist for Kingdom Financial Holdings Ltd Witness Chinyama said.

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