At the last session, the Government of the FBiH made a decision with which was approved indebtedness of citizens of FBiH for 160 million BAM. These funds will be used to finance the expenses determined in the budget of FBiH for 2017.
The Government of FBiH adopted two decisions on approving the indebtedness of the FBiH through the issuance of treasury bills of FBiH at the session that was held on the 23rd of March this year, and it is a nominal amount of 80 million BAM in both cases. According to one decision, the maturity date of treasury bills is 91 days or 181 days in the second case.
As stated in the decision published in the Official Journal of the FBiH, these are nominal values of 10,000.00 BAM or 20,000.00 BAM if you count both decisions.
Sale of treasury bills is done through auctions on SASE by the method of multiple prices and the ownership over the treasury bills is acquired on the day of settling by entry of treasury bills to the appropriate securities accounts which are maintained at the Registry of Securities in FBiH and it gives the owner the right to charge a nominal value on the day of maturity of treasury bills.
Treasury bills are short-term securities that the Government of FBiH sells upon maturity or returning the money to the banks that buy them for three months, six months or one year.
Economic analysts warned federal officials to approach the sale of treasury bills in a more rational way, especially after the auction in December 2016 when the Government of FBiH from the planned amount of treasury bills, which amounted to 30 million BAM, managed to collect only 4,971,492.50 BAM. Politicians were warned that commercial banks have sent a clear message that the Government of FBiH no longer enjoys their trust.
World media are writing that the sale of treasury bills is a way to try to patch the holes that were created when the IMF and World Bank denied funding to authorities due to their failure to implement economic reforms.
In a healthy economy, budgets are filled with regular income tax, direct and indirect taxes, and the spending is adapted to them. Due to the mismatch of public spending and taxes, the missing funds were provided from the sources of domestic financing, namely bonds and treasury bills, this and last year in both the FBiH and the RS.
With constant compensation of funds by selling treasury bills, or “flying debt” from the point of the budget deficit is increased the internal debt by obligations that are short-term. These obligations are constantly maturing, which means that it is a problem of liquidity.
To recall, on the same day when the Government of FBiH adopted a decision on the debt, the Deputy Prime Minister of the RS Anton Kasipovic announced indebtedness of the Government of the RS in the amount of 50 million BAM in commercial banks, which should help the liquidity of the smaller BH entity.
(Source: Er. M./Klix.ba)