Sinckler pleased with take-up of savings bonds
Minister of Finance Chris Sinckler says four bond issues totaling $90 million have been made by the Central Bank since it re-launched its savings bonds programme last year.
Speaking in Parliament during debate on the Savings Bonds (Validation) Bill, 2016, he explained that $80 million worth in savings bonds were issued last year, along with a further $10 million this year.
Of that total, approximately $88.1 million had already been subscribed.
Sinckler told fellow legislators the decision to relook and re-launch the savings bonds was based on the level of liquidity in the banking system. He also pointed to research which had shown that the majority of investors in the savings instrument were people over 55 years and that residents were not fully aware of the bonds or how to access them.
Therefore, he said a number of changes had to be made to make the savings bonds more attractive and to correct some of the issues identified in the past.
Expressing delight over the huge appetite among residents for Government bonds which carry an interest rate of 5.5 per cent, Sinckler said: “For 2015, I can say that is the largest amount cumulatively of any set of savings bonds issued in any single calendar year since bonds were being issued in Barbados from 1981.”
He did not give details of the maturity profile of the bonds, but said Government had already started to look at how it would meet its obligations for the periods 2021 and 2022.
However, while expressing satisfaction at the quick take-up, Sinckler said he remained cognizant of the various maturity dates as well as Government’s debt profile and ability to meet all its commitments.
“So even though the response to the savings bonds has been so good and attractive and everybody is excited, the Ministry of Finance still has to be mindful of how they are issued,” he said.
Sinckler also said there might be need for Government to “diversify” treasury notes and other forms of bonds and make them “more sophisticated” and in order to raise funds to help with “development issues relating to economic sectors, tourism, investment and infrastructure.
“So we may need to look, for example, at creating special bonds like infrastructure bonds that people have done in other countries to draw resources out of the public that we could invest in those areas at a relatively good cost, knowing that it would be Barbadians supporting other Barbadians in terms of the development of our country.
“These are things we can tease out and explore going forward,” he said.