Government is seeking to raise $ 30 million for various unspecified developmental programs by issuing Treasury Bills of 91-day tenure to local banks starting today, 263Chat Business can report.
In a statement issued by Reserve Bank of Zimbabwe (RBZ), the TBs will be tradable, tax exempted and prescribed as assets.
“The Reserve Bank of Zimbabwe (RBZ) hereby invites Commercial banks and Building Societies registered in Zimbabwe, POSB and IDBZ to subscribe to Treasury Bills amounting to thirty million dollars (ZWL$ 30 000 000),” read the statement.
However, this comes at a time the government is making fiscal surpluses on a monthly basis and the latest round of TBs issuance has raised concerns over the continued debt contraction by Treasury.
Government reported a ZWL$ 443.1 million budgetary surplus during first quarter of 2019.
In contrast, during the same period, the government issued ZWL$ 180 million worth of debt instruments which Finance and Economic Development Minister, Mthuli Ncube said the funds were used to restructure previous year’s maturity debt.
There are widespread fears that the minister might be backtracking on his assurances since coming into office of stemming Treasury reliance on debt instruments to raise funds for its programs.
Analysts have however called on Treasury to exercise caution in its issuance of TBs in the wake of gains made so far from the austerity measures the government has implemented starting last year.
“Since the Minister took the austerity route and has declared surplus in first quarter, we don’t need to go back to financing the government program through treasury bills unless if it’s absolutely necessary to do so, maybe in a case of an emergency but I think we are supposed to stick to austerity, generating more revenue and then later on use it towards various programs,” economic expert, Pepukai Chivore said.
Previously the government has saturated the financial sector with TBs, a case that brought about the creation of “fake” money in RTGS form leading to exchange rates volatility.