T-Bills worth Nu 19bn as of June 24

The government has collected Nu 8.2bn from bonds, according to the finance minister

As of Friday, the government’s Treasury Bills (T-Bills) are worth Nu 19bn. Of which, the government has offered T-Bills worth Nu 3.5bn for sale and it will drop to Nu 15.5bn worth this month.

Finance Minister Namgay Tshering shared this information to the House when MP Ugyen Dorji from the Dewathang-Gomdar constituency asked the minister about the T-Bills and bonds sold by the government during the question-answer session.

Meanwhile, T-Bills are a debt instrument issued by the government to mobilize funds from the market, whereas this can be negotiated and traded freely.

“T-Bills are used as a monetary measure and it is also the short-term cash management in the country,” Lyonpo said, adding that the T-Bills have a maturity period of 91 days and are being auctioned and issued through the Royal Monetary Authority.

Lyonpo said that the sale of T-Bills comes at a time when the government is reportedly facing a shortage of funds. T-Bills can be used for financing temporary revenue shortfalls in the government budget.

“The sale of T-Bills is a regular practice,” Lyonpo Namgay Tshering said, adding that this is issued to ensure un-disrupted cash flow in the market where it will help the economy of the country.

Lyonpo shared that financial institutes have proposed to convert T-Bills worth Nu 4bn into bonds, which will be added to the T-Bills. T-Bills are issued when the government needs money for a short period.

In addition, Lyonpo said that the government has been using T-Bills for deficit financing and cash management as of today.

Meanwhile, when the government goes to the financial market to raise money, it does so by issuing two types of debt instruments including T-Bills and government bonds.

Lyonpo Namgay Tshering said that the government plans to raise financing through long-term bonds of different maturities, while treasury bonds are considered long-term bond securities, their maturity period is from one month to four months after they are sold.

“A long-term bond is used when there are no economic activities and excess liquidity in financial institutions; the government used a lottery as a middle path to collect money and distribute it. It is also one way of monetary measure,” the minister said.

According to the Lyonpo, the government has collected Nu 8.2bn from bonds. Of which, Nu 7.5bn was put as a national reliance fund and Nu 700mn was put in the National CSI Development Bank.

Kinley Yonten from Thimphu