NEW: RBZ to raise $1,55bn with 2-year Treasury Bond

The Sunday Mail

Online Reporter 

Government, through the Reserve Bank of Zimbabwe (RBZ), has issued a two-year Treasury Bond with the aim of raising $1,55 billion for the funding of Government programmes. 

The issuance of two-year paper is a strong indicator of the economic stability. 

A stable macro-economic environment – fostered by fiscal prudence and the RBZ-driven foreign currency auction system – has seen improving market appetite for Government paper improving in recent months after demand had waned due to rising inflation in the past.    

The two-year Treasury Bond will have a coupon rate of 18 percent per annum, which is payable semi-annually on February 20 and August 20 until maturity. 

The offer, which opened yesterday, will close on August 18, while the payment and issuance date have been set for August 19 and 20, respectively. 

In recent issuances, the central bank has kept to one year (365 days) tenure paper, although the trend in past issuances has consisted of a variation of 180-day, 270-day and 365-day paper. 

According to the Government Debt Plan for 2021, treasury bill auctions will now be held every Thursday with 80 percent of the money expected to be raised from the treasury bills while the remainder from treasury bonds.   

The main difference between treasury bills and treasury bonds is the maturity term – treasury bills have maturities of up to one year, while bonds typically have maturities of more than one year.