Government hailed for solving forex situation

Nasfund has congratulated the Government’s effort in resolving the foreign exchange situation by its successful debut to international money markets.
The company said in a statement that raising the US$500 million (K1.6 billion) 10-year bond last week was “a step in the right direction and a coming of age for the country”.
“While the immediate effect of relieving acute shortages of foreign currency will be welcomed by businesses, this should lead to a reduction in cost of domestic borrowings by the government,” Nasfund said.
“Furthermore, business houses will be able to negotiate better pricing on imports leading to better stock management and increased profitability.
“The success of this bond-raising and its over subscription is therefore a vote-of-confidence in our prospects as a nation and points to continued development of industries that can achieve export earnings and broaden the country’s tax base.
“While the Government will always rely on big local institutional investors like super funds and banks to fund the bulk of its domestic borrowings, this added dimension will relieve the burden and we will share the load.
“As a relatively small and undeveloped market, global winds of change can sometimes be a mixed blessing, but coming to terms with our place in the region and as a growing exporter of extractive resources will ultimately improve our resilience.
“It is important to demonstrate that we have a proven ability to successfully tap into the international money markets as and when required.
“We acknowledge that not only does this increased set of options for funding the Government represent a safety valve, it means that improved transparency and fiscal discipline will be required to maintain the confidence of international markets.”