The government through the National Bank of Rwanda is planning to issue Treasury bonds worth Rwf10 billion on the secondary market before the end of this year.

This was announced last week by Clever Gatete, the Deputy Governor of the central bank during the issuing of this year’s first Treasury bond.

"As the government or central bank, we participate on the capital markets to encourage the secondary market so as to make sure that it makes an impact on the development of the country,” Gatete explained.

The government last week floated Rwf2.5 billion in bonds at an interest rate of 9.5 percent whose maturity period is two years.

The central bank official said that in April this year, the government will float another Rwf2.5 billion in bonds for a maturity period of three years while in July, another Rwf2.5 billion for two years and in October Rwf2.5 billion will be issued on the market for a period of 5 years.

For all the issued bonds, the coupon rate will be determined by the market forces of demand and supply.

The government has previously issued three treasury bonds (2008) which they raised Frw14.3 billion.

With the listed previous bonds soon expiring, the government decided to float another bond of two years in an effort to reactivate the market.

"The performance of the previous bonds was way higher than we expected showing that Rwandese are getting to understand the importance of capital markets,” explained Gatete.

The government also expects this bond to develop the capital market because the bond market plays an important role in pricing of assets in the economy.

The Rwanda over-the-Counter Market currently lists three treasury bonds, one corporate bond and the cross listing by Kenya Commercial Bank (KCB).

The capital markets being a new concept to the country, the Capital markets Advisory Council (CMAC) has been involved in a national wide awareness program informing the public which products are available on the market and the benefits of investing in them.

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