RTGS$180m TBs were for restructuring maturing debt

Tawanda Musarurwa
HARARE – Treasury Bills (TBs) to the tune of RTGS$180 million that were recently issues by Government were solely for the purpose of restructuring previous years’ maturing debt, Finance and Economic Development Minister Mthuli Ncube has said.
Minister Ncube said no TBs would be issued this year to fund Government expenditure such as salaries as the Government was currenctly cash-positive.
“The budget balance for the period January to March 2019 was a surplus of $443, 1 million, against a target of $78,2 million, indicating a major shift in the management of Central Government finances from deficits to surpluses. As a result, since January 2019, no Treasury Bills nor the overdraft facility were utilised to finance the budget,” said the Minister.
This is a significant shift away from the past years when the financing of the deficit was largely achieved through domestic borrowing with the use of TBs and from the overdraft facility with the Reserve Bank of Zimbabwe (RBZ).
Treasury Bills (TBs) are negotiable instruments issued by Government through the central bank to finance the State’s short-term requirements.
But last year Treasury placed a moratorium on the issuance of the Treasury Bills (TBs).
The Treasury Bill Auction System will be operational by the start of the fourth quarter of this year, Minister Ncube said.
“With respect to implementation of the Treasury Bill Auction System, I envisage that this will now commence by the fourth quarter due to the recent measures announced in the Monetary Policy Statement. This will allow the markets to settle on the Treasury Bill market.
“The domestic debt stood at $9,2 billion down from $9,6 billion in December, 2018. This represents a $326 million decrease in domestic debt. The decrease in the stock of debt was on account of debt repayments with a minimal Treasury Bill issuance of $28 million for cash flow management purposes.”
Earlier figures from the Ministry of Finance and Economic Development indicated that around 50 percent of the TBs were currently being held in medium to short-term paper, while 26 percent had tenors of between 2,5 to 5 years.
The numbers also showed that 17 percent of the TBs have tenors of between 6 to 10 years, and the balance have a tenor of between 11 to 15 years.
And that TBs from the secondary market have coupon rates ranging from 2 percent to 5 percent with maturity periods ranging from one year to four years.