Zimbabwe Said to Have Issued Treasury Bills to Repay Seven Banks

Zimbabwe has issued $103 million of Treasury bills to seven banks as the government repays debt stemming from the central bank’s seizure of foreign-currency accounts, according to a person with knowledge of the matter.

The Treasury bill issue represents an acknowledgment by government of the debt, said the person, who asked not be identified because the information is private. Finance Minister Patrick Chinamasa last month confirmed that a Treasury bill sale is taking place, without providing further details.

The government announced in November that it planned to offer Treasury bills to settle $1.35 billion in debt, which accumulated after the central bank raided foreign-currency accounts in 2006 and 2007. The bank owes $754.3 million to domestic creditors and $596 million to lenders outside Zimbabwe, the state-controlled Herald newspaper reported.

In 2012, the central bank failed in its first auction of Treasury bills since the country abandoned its currency and adopted the dollar and other currencies in a bid to curb surging inflation four years earlier. The central bank previously printed money to pay government debts, fueling inflation to an estimated 500 billion percent, according to the International Monetary Fund.

Foreign banks that operate units in the southern African nation include the U.K.’s Barclays Plc, Old Mutual Plc and Standard Chartered Plc, Togo’s Ecobank Transnational Inc. aswell as South Africa’s Standard Bank Group Ltd. and Nedbank Group Ltd.

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