The effectiveness of treasury bills in stimulating growth of the Zimbabwean economy
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The aim of this study is to evaluate the effectiveness of treasury bills in stimulating growth of the Zimbabwean economy. Literature on the effectiveness of Treasury bills asserts that treasury bills contribute to the growth of the economy. Interviews were held with the Ministry of Finance, Banks and Pension Funds as well as the Zimbabwe Stock Exchange (ZSE). The researcher managed to interview eleven interviewees with all sectors of the economy being represented. Tables and content analysis were used to present data. The research found that the current status of treasury bills issuances in Zimbabwe is that most organisations are not participating in the market for securities. The Government issued treasury bills but their uptake has been very low. This is due to a number of factors which include too much debt in the market, insufficient capital, poor interbank trading, unavailability of collateral security for the lender-of-last- resort, as well as for the settlement systems such as ZimSwitch, RTGS and a poor cheque clearing system. Treasury bills were not found to be effective enough in Zimbabwe as money market instruments to mobilise funds for the government. They have not had a positive influence on the availability of liquidity in the Zimbabwean economy. The research recommends that Treasury bills should be affordable and attract an economically competitive benchmark value in the securities market. There should be a buy-back feature of TBs and there is need for more risk free instruments for money market borrowing. In order to stimulate growth of the Zimbabwean economy, the research recommends that the Government of Zimbabwe should continue with its cash budget approach and improve it. An area of further study is recommended to investigate the impact of dollarization on the performance of stock markets in Zimbabwe; in as far as they influence money supply and liquidity in the economy.