Cabinet approves issuance of K1.92 billion in inscribed stock

The National Executive Council has approved the issuance of up to K1.92 billion in inscribed stock in 2014.

Prime Minister Peter O’Neill said Cabinet in a recent meeting agreed to advise the Governor General to authorise the Treasury Minister to issue up to K1.92 billion in inscribed stock in 2014 in accordance with the Loans Securities Act 1960 (Chapter 134) and aligned it to the debt strategy.

“NEC has also noted the Minister’s decision to implement the 2014 Debt Issuance Program by increasing total government debt by net of K2,355.5 million which includes increasing domestic debt by a net of K1, 707.7 million, and foreign currency loans by a net of K647.8 million,” he said.

“The 2014 Debt Issuance Program is a large financing task, similar to that of 2013. The financing requirement is K2355.5 million and the level of debt projected to GDP is expected to be 35.2 per cent. This level remains consistent with the Medium Term Fiscal Strategy 2013-2017 and the Fiscal Responsibility Act 2006.”

The Department of Treasury has already canvassed the views of domestic investors, and will hold monthly Inscribed Stock auctions on the third  Tuesday of each month starting on January 21.

“Monthly competitive auctions are best-practise as they spread the new borrowings evenly in 2014, and ensure the government borrows funds at the cheapest rate," O'Neill said.

" On a quarterly basis, the Treasury Department will provide an updated schedule to investors in consultation with the Central Bank (BPNG) and investors whereby it will accommodate changes that require smoothening of administrative processes relevant to the issuance and settlement of inscribed stock.”