Axe On Dollars

The government has drastically cut its planned commercial dollar borrowings in the wake of large aid flows and promised long term structural adjustment loans.
The treasury, which was planning to borrow up to US$ 350 million in the international markets, has cut that amount to US$ 100 million, which is expected later this month.rn

rnCitibank that was mandated to raise US$ 150 million initially has had its mandate cut to a US$ 100 million.rn

rnThe government has also decided to abandon an option to raise further money through a loan jointly arranged by Deutsche Bank and UBS Warburg. rn

rnThe cut on commercial borrowings come on the back of a promised poverty reduction growth framework loan from the IMF and possible World Bank support credit for the budget. rn

rnThe IMFs PRGF loan is expected later this month while World Bank funds could follow soon afterwards. rn

rnOver a dozen top investment banks responded to the initial government invitation to rise up to US$ 350 million in the international markets.rn

rnHowever the government is now limiting that borrowing to US$ 100 million to be raised by Citibank.rn

rnIn addition to promised support from the IMF and World Bank the government has also managed to generate reconstruction aid from both bilateral and multilateral lenders.rn