The Government of Republika Srpska will borrow another 15 million BAM in June through an auction of treasury bills. The auction will be held at the Banja Luka Stock Exchange on June 12, 2023.
What is very unusual about this auction is that the maturity of these securities is only two months.
Namely, the due date, that is, the date when the Government must return the money it collects from investors through this auction – is August 11 of this year.
Treasury bills, unlike bonds, are short-term securities. However, even their maturity period is usually six or nine months.
Borrowing for two months is extremely unusual but also unfavorable, because the Government will have to look for funds already in August to return this money.
Also, they probably don’t want to risk anything, because a shorter payment term means a lower risk for investors who are finding it increasingly difficult to decide to lend money to the RS authorities.
Let us remind you that on June 20, the Government of the RS is going to attempt a large borrowing of 210 million BAM. These are five-year bonds with a maturity date of June 22, 2028. The interest rate is fixed at 6.1 percent annually.
There has been a lot of talk about this assignment in recent days. The government of the RS is thus trying to collect the money it needs to service the previous debt from the Vienna Stock Exchange.
But the big question is who will provide that money, because commercial banks, which are normally the main buyers of bonds and treasury bills, are finding it increasingly difficult to decide on investments in RS securities, Biznis Info reports.
