Rwanda to issue liquid treasury bond to boost its capital market
Feb 18,2014
KIGALI, Feb. 17 (Xinhua) -- The Rwandan government on Monday announced
plans to issue 12.5 billion rwf (18.3 million U.S. dollars) Treasury
bond with a three-year maturity period as a move to boost the East
African capital market, according to the statement issued by the
Central Bank in the capital city Kigali.
It is said the aim of this move is to achieve inclusive growth in a
country which is emphasizing to reach middle income status by 2020
with an annual per capita income of 1,240 U.S. dollars per person.
In a statement issued in Kigali, the Central Bank said the Treasury
Bonds have been issued by the Rwandan government between 2008 and 2011
and they were amounting to 31 billion rfw (45.5 million U.S. dollars).
A big part of it has been paid back and only a stock of 8.5 billion
rwf is not yet retired, the statement said citing the Rwandan Minister
of Finance and Economic Planning, Claver Gatete.
Moreover, official statistics showed that in the past, the
subscription level was at 197 percent in average and the price ranged
between 8 percent and 11.5 percent.
It is said that these treasury bonds are expected to target especially
local banks, investment groups, micro-finance institutions,
cooperative Banks, insurance companies, pension funds among others.
Domestic preliminary market surveys indicated a huge appetite from
local investors while regional investors have expressed interest in
participating in the local market following the success of the Rwanda
Sovereign Bond and the need for diversification.
However, the Rwandan official explained that as for foreign
participation, only regional institutional investors and fund managers
will be targeted due to the size of the issue which is very small by
international standards.
"But there will be no restriction to participation by investors
outside member countries of East African Community," Gatete said.
In the implementation phase, withholding tax on interest has been
reduced from 15 percent to 5 percent for EAC resident tax payers
investing in three years and above, the statement said.
http://www.shanghaidaily.com/article/article_xinhua.aspx?id=201161
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SIBOMANA Jean Bosco
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