DDEP: Investors cautioned as government is likely to include treasury bills – Joe Jackson projects
Joe Jackson is a financial analyst
An Economist and Director of Business Operations at Dalex Finance, Joe Jackson, has warned investors to be careful about investing in government's treasury bills as current uncertainties may result in its inclusion in the debt exchange programme.
Read full articleAccording to Norvan reports, the economist stated that the current high-interest rates on treasury bills show that the government is desperate to borrow more to fund its “profligate lifestyle”.
“I would advise that investors should be extremely cautious in investing in T-Bills as the government is likely to include it in the domestic debt exchange programme, although the Finance Minister says it won’t. And also, the rates on the T-Bills have gone crazy, they are not sustainable.
“Investing in T-Bills is investing in a government that is desperate, the government should be reining in expenditure and not be borrowing more. Let’s not help fund their profligate nature and fiscal indiscipline,” he was quoted by norvanreports.com.
In the same vein, Kenneth Thompson, CEO of Dalex Finance, stated that Treasury bills are at very high risk due to the government’s posture.
He intimated that Treasury bills have become the government’s main source of borrowing.
“Government is now borrowing strictly for consumption and not for anything productive that can pay for debts by itself. And by the way, T-Bills are supposed to be used to solve short-term financing challenges and not a main source of financing. The government must learn to live within its means.
“The interest rates on T-Bills are unsustainable and with the way things are going, it will crash as it has done before,” he stated.
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