September 30, 2020

ECCU Governments raise $10.6 billion on RGSM


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As the Regional Government Securities Market (RGSM) approaches its 15th anniversary, member states are celebrating their success in raising over $10.6 billion in Treasury bills and Bonds to finance government operations.

This is according to the Eastern Caribbean Central Bank (ECCB).

The RGSM is a regional market for the trading of debt instruments of the member states of the Eastern Caribbean Currency Union, which comprise Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St Kitts and Nevis, Saint Lucia, and St Vincent and the Grenadines. The instruments on the RGSM take the form of government Treasury-bills and bonds and have varying maturities, ranging from 91 days to 10 years. These securities are backed by the full faith of the governments of the issuing member states.

While securities on the RGSM are open to all potential investors, only licensed brokers are allowed to bid in the RGSM auctions. The minimum bid amount on the RGSM is currently set at EC 5000.

The Regional Debt Coordinating Committee (RDCC) has direct oversight for the RGSM. It comprises the senior officials from the Ministry Finance of the ECCU member countries and the Governor of the ECCB.

At its first meeting for 2017, the RDCC reported that the value of bids from investors in the regional market increased by 2.1 per cent in 2016 to $1.5 billion. The increase was realized in spite of the decline in the number of securities issued on the RGSM, which fell from 53 to 51.

The RDCC is concerned with the recent decline in the number of bond auctions on the RGSM, as only three bonds were issued in 2016.

The Committee has agreed to a set of reforms to be implemented by the respective Debt Management Offices and the ECCB, with the support of the ECCB and the IMF and funding from the Government of Canada.

The RDCC is encouraging all governments to promote the use of the RGSM through the development of formal investor relations programs.

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