The Maldivian government has once again turned to Treasury bills (T-bills) as a means to cover its expenditure, opening MVR 2.2 billion worth of T-bills for sale. This marks the second time this year that the government has opted for this financial instrument.
The Ministry of Finance has detailed the composition of the T-bills on offer. It includes an MVR 974 million T-bill with a 28-day repayment period and an MVR 316 million T-bill set for a 98-day repayment. Furthermore, the government has also announced the sale of MVR 149 million worth of T-bills with a 182-day repayment period and MVR 842 million T-bills, which are due in 364 days.
Earlier this month, the Finance Ministry successfully sold MVR 4 billion in T-bills, reflecting a continued reliance on this form of short-term borrowing. The interest rates for these T-bills are variable, ranging from 3.50 per cent to 4.60 per cent, depending on their maturity period.
A significant portion of these T-bills is purchased by the national pension fund, various banks, and some state-owned companies. Additionally, there is participation from private sector companies, indicating a broad base of confidence in these government-issued securities.
T-bills are a form of short-term government security issued at a discount from their face value. In the Maldives, these instruments are an integral part of the government’s strategy to manage short-term funding needs. By issuing T-bills, the government can efficiently raise funds to cover its expenditures while offering investors a reliable and relatively low-risk investment option.
