Central bank to issue more bonds

National Bank of Rwanda (BNR) plans to issue more treasury bonds when the Rwanda Over-The-Counter (OTC) market opens. The bond with the same terms will be issued today, during the launch of the OTC market. The third bond to boost the market will be offered in Mach, François Kanimba, the central bank governor said. By the end of last year, the bank had outstanding treasury bills worth Frw36 billion. Government decided to turn treasury bills worth Frw20 billion into long term financial products, with Frw16 billion remaining in treasury bills. “We have decided to extend the maturity period of these treasury bills in order to turn them into bonds. Government is not collecting fresh revenues from the issued treasury bills,” Kanimba said. The central bank issued a two-year treasury bond on January 17. The move was to support the development of the capital market in the country. The Frw5 billion bond with coupon rate of 8 percent is reported to have been oversubscribed by Frw2.6 billion. Financial experts in the country look at the development of the capital market in Rwanda as a strong boost to the economy and the financial sector in particular. Rwanda Over-The-counter market is also looked at as something that will offer cheap source of financing as opposed to exorbitant debt financing from commercial banks. “In any market you need risk-free investments that act as a benchmark for corporate bonds,” Kanimba said. He added that as operations develop, the market will shift from a bond market to include other products like shares (equity). Ends