The Zimbabwean central bank, the Reserve Bank of Zimbabwe (RBZ), has announced plans to introduce a Central Securities Depository (CSD) for government securities by the end of the first quarter of this year.
“The introduction of the CSD will bring about operational efficiencies and will improve transaction processing with respect to government securities,” says a spokesman for Standard Bank in Johannesburg. “Furthermore, it will eliminate the risks associated with the physical movement of paper certificates.”
The CSD will make it possible for government securities transactions to be processed by electronic book entry without physical movement of paper. Banks will be expected to process their own transactions, monitor their positions and produce reports.
The CSD will also facilitate the creation and issuance of securities in accordance with international standards of securities numbering (ISSN), and irrevocable delivery versus payment (DvP).
Zimbabwean government securities issued by the RBZ include RBZ Special Bills, PLARP Bonds, Zimbabwe Government Local Registered stocks, RBZ OMO bills and Zimbabwe Government Treasury Bills.
Standard Bank says most of the securities have been used by the RBZ to control the growth of the money supply as well as supply liquidity to the money market and restructure government debt.
Efforts to modernise settlement systems in Zimbabwe have been hampered by lack of funds. Plans to switch from floor trading to electronic trading on the Zimbabwe Stock Exchange (ZSE) have been delayed as the exchange struggled to raise US$2 million to fund the project. The RZB recently pledged financial assistance.