ECCB 2018-2019 Annual Report and Statement of Accounts

The RGSM: A Viable Financing Option for Member Governments ECCB member governments raised $1.3 billion on the Regional Government Securities Market (RGSM) in 2018, representing a 4.4 per cent increase over 2017. The increase was due to the growing number of residents of ECCB member countries, who are investing on the RGSM as an option for increasing their interest income and diversifying their asset portfolios. The value of securities raised on the RGSM during 2018/2019 amounted to $1.3 billion, marginally above the $1.2 billion in the preceding year as five of the member governments continued to utilise the market to meet their borrowing requirements. There was a decline in the number of auctions on the RGSM during the year, mainly due to the cancellation of a series of Treasury bills by the Government of Grenada given the improvement in its fiscal performance. Yields on the RGSM continued to trend downwards especially on the short end of the market. The Weighted Average Interest Rate (WAIR) on securities of three-month duration fell below 3.0 per cent at 2.6 per cent in 2018/19. Rates on the long end of the market remained stable with the 10-year bond increasing by 6bps to 7.3 per cent. Notwithstanding the decline, rates on the RGSM remained very competitive for residents and non-residents compared with commercial bank deposits and securities from other countries.

Although trading on the secondary market for government securities remained thin, there was an increase of $2.2 million (9.8 per cent) in trades amounting to $25 million during the year.

Chart 3 - Activity on the RGSM 2011- 2018

Chart 4 - Imputed Yield Curve on the RGSM

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