Parliamentary Budget Office has warned that the Government could default on its Treasury Bills payment obligations on maturity. Currently, TBs worth $2,5 billion have been issued to the market.
Part of the report reads:
The TBs are creating more fictitious money than what is necessary. With commercial banks becoming increasingly fearful, and rightfully so, about the potential for TBs default, banks have smartly preferred to hold onto physical US dollar, limiting withdraws and international card transactions. The TBs face further potential mark downs with the new accounting procedures under the International Financial Reporting Standards 9 rules that will take effect on January 1 next year.
However, economist Brains Muchemwa dismissed the warning by the Parliamentary Budget Office.