Jan 2007 Financial News

Central Bank bids to raise $300m in bonds

Jan 29, 2007

THE Central Bank has launched its second tranche of bonds to absorb excess liquidity in the financial system, as part of the continuing battle to reduce inflation.

The new bonds are for five and a half years with a coupon rate of 7.80 per annum and the Government proposes to raise $300 million. It is being sold in the automated, single price auction system (everyone pays the same price for the bonds), and interest is payable semi-annually on August 9 and February 9.

The auction was opened yesterday at 10 a.m. and will close at 1 p.m. on February 7. The new issue is the second of a series of bond issues for fiscal 2006/2007. The first tranche was issued on November 30 last year, and successfully raised $700 million.

The issues are part of $2.5 billion in Government bonds to reduce the rate of inflation, currently at 9.1 per cent.

Deputy Central Bank Governor, Joan John, speaking at a media conference at Central Bank, Port of Spain, said with the previous issue of bonds there has been much less liquidity in the system.

Commenting on whether promises by Minister in the Ministry of Finance Conrad Enill that Government will reprioritise its expenditure as part of measures to curb inflation were being fulfilled, John noted that the Central Bank receives Government expenditure when cheques are encashed and not when they are issued, and this therefore does not reflect the timing of Government expenditure in any way.

Source:

The Trinidad Express
Saturday 27th January, 2007
http://www.trinidadexpress.com/index.pl/article_business?id=161091328