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| Mr Collin Dore Treasurer in the Nevis Island Administrations Ministry of Finance. |
CHARLESTOWN NEVIS (January 12, 2006) The Nevis Island Administration NIA) has collected near EC$40 million through the issue of Treasury Bills, a performance according to Treasurer Collin Dore, which has surpassed the Administration's expectations while the demand for the Bills continues to grow.
According to Mr Dore, the initial projection when the bills were first introduced was set at EC$12 million and in the first issue EC$5 million was raised. To date the Treasury has issued 15 Bills.
"To date we have raised in Treasury Bills close to EC $40 million. Treasury Bills mature every three months, at the end of each quarter the Treasury Bill holder has the option of either cashing in his Bill or rolling over for a continuous period. What we have been seeing is that persons are not cashing in, instead they are rolling over and actually demanding more Bills.
"So right now we have a situation where the demand is more than what we have available for supply. Therefore we have had to turn back some persons and I think that's a good thing where individual persons saw it fit to invest in the operations of government.
"The initial amount that we were looking at was $12 million and we actually surpassed $5million in the first issue and it has been rolling since that. We realise that we now have to put a cap on the Bills to curb the rate at which it is going because a Treasury Bill is a debt and at sometime it has to be repaid,"he said.
The Treasury Bills are short-term government issued debt instruments whose return is determined by prevailing market rates of interest. They are equivalent to a 91 day fixed deposit held at a bank.
According to Mr Dore, the NIA through the Ministry of Finance had taken the decision to introduce the Treasury Bills at a time when debt management/debt restructuring had become a major issue for Caribbean countries.
He explained that the main reason for taking the initiative was to take advantage of the lower seven percent interest rate of financing government's operations opposed to the 11 percent interest rate offered on loans by commercial banks.
Commenting on the public's reaction to the Treasury Bills, Mr Dore said it had been outstanding, noting, "we are quite pleased that at least 90 percent of our Treasury Bills at this time is held by individual persons with firms making up only a small portion."
The Treasurer said, when the Bills were first issued businesses were the initial target but based on the response, it was realised that individual members of the public were also looking for investment opportunities "and they too were interested in investing in Treasury Bills to ensure that at the end of the day they would have contributed to the development of Nevis by funding some of the activities of government," he said.
