THE Reserve Bank of Zimbabwe yesterday failed to sell $30 million of Treasury Bills despite an ultimatum by Finance minister Tendai Biti for banks to buy the securities.
Report by Business Reporter/Bloomberg
Biti at the weekend said if the main banks failed to take part in the auction they would be compelled to acquire negotiable certificates of deposit. The RBZ rejected the $8, 65 million worth of bids that were made at yields of between 8,5% and 12% for the 91-day bills, sources said.
The central bank last month rejected all bids at two sales while a third sale of $15 million generated $9,9 million in accepted bids. The securities are the first to be offered by the apex bank since 2008, shortly before Zimbabwe abandoned its currency in favour of the US dollar.
The African Development Bank in its Zimbabwe Monthly Economic Report for October suggested that the failure by some big banks to participate suggested there were issues that required government attention.
“These include scepticism around government’s ability to honour the TBs at maturity, absence of a buy-back feature of the TBs and less need for additional collateral security instruments for borrowing in the inter-bank market by big banks that still lend and borrow bilaterally among themselves,” reads part of the report.
“It seems that the issue of collateral security that the TBs would have served does not seem crucial for the big banks, most of which are sitting on idle funds as shown in Zimbabwe Electronic Transfer Settlement System (ZETSS).”