06.15.08
Seychelles Central Bank opens bonds market
In order to increase investment flexibility, the Central Bank of Seychelles has announced the introduction of a new service.
The new service allows to sell and buy government-issued bonds. Those who hold government bonds will now be able to sell these bonds to the Central Bank of Seychelles before the bonds reach their maturity. This will allow them to access funds that would have been tied up otherwise. Then, the bonds bought by the Central Bank of Seychelles will be sold to people.
According to Central Bank governor Francis Chang Leng, before this new initiative has been launched people holding bonds faced the difficult prospect of trying to find a buyer if they wished to sell the bonds. This difficulty even increased if they wanted to sell large amounts of bonds. “The introduction of the Central Bank secondary market for bonds offers a fast, efficient and guaranteed market for people wishing to sell bonds and an easy access point for people who wish to use an investment in government bonds as an alternative to saving their money in the bank.â€
Bond holders who intend to use the new service will have to visit the Central Bank of Seychelles, where they will be able to cash either in the full value of their bonds or a percentage of them.
The Central Bank will charge an administrative fee of 0.25% on the face value of the bonds in order to finance the new service.
As a secondary market will be introduced, bond holders will be allowed to exchange their bonds for currency, which will increase their financial liquidity. Nevertheless, the overall level of liquidity will not change because the bonds will stay in circulation.
Central Bank governor Francis Chang Leng hopes that the introduction of the secondary market for bonds will increase people’s familiarity with trading in bonds and other investments, and with “providing an additional interest-earning opportunity for savers looking for the best return on their moneyâ€.