By Kiana WilburgA Treasury bill, commonly referred to as “T-bill,” is a form of security used not only by the Guyana Government but governments across the world to secure large sums of money, with the understanding that it must be paid by a specific date. So when an individual or a company buys a Treasury bill from the Central Bank, they are basically lending the government money which would be repaid by a deadline.While Treasury bills have a “face value” of a certain amount, which is what they are actually worth, they are however, sold for less. For example, a bill may be worth $10,000, but it would be sold to a company or individual for approximately $9,600. The money paid represents the loan to the government.Now, every bill has a specified ”maturity date” which is when the investor is repaid. The Guyana government then pays you the full price of the bill — in this case $10,000 — and you earn $400 from your investment. The amount that you earn is considered interest, or your payment for the loan of your money.The difference between the value of the bill and the amount you pay for it is called the discount rate, and is set as a percentage. In the aforementioned example,NBA Jerseys From China, the discount rate is four percent, because $400 is four percent of $10,Hydro Flask Water Bottle Wholesale,000.Furthermore, Treasury bills are one of the safest forms of investment in the world because they are they are considered risk-free.From time to time, many individuals and institutions enquire about investing in Government Treasury Bills, which is handled by the Bank of Guyana. Treasury Bills remain the Bank’s principal instrument of monetary control and so it continues to be involved in the auction of treasury bills with various maturities (91-day, 182-day and 364-day) in the primary market.In addition to refinancing maturing debt and raising new funds to meet current obligations,Clearance NCAA Jerseys, these offerings of T-Bills are made as part of the authorities’ strategy to sterilize excess liquidity in the financial system.The amount of Treasury bills offered by the Central Bank is published in the national newspapers. Among the information published for each tender are those relating to the issue date, the maturity date, the closing date for tender, the settlement date, and the average discount rate for the previous issue. After submission, bids are accepted on a competitive basis. The higher the offer price, the lower will be the discount rate and thus the more competitive will be the investor’s bid and the greater the chances that the bid will be accepted.According to the Bank’s 2014 Annual Report, the conduct of monetary policy continued to focus on price stability, while ensuring an adequate level of liquidity in the system and creating an enabling environment for economic growth.It was noted that the Bank’s holdings of Treasury bills decreased to G$1,606 million from G$3,497 million at the end of 2013.For 2014, the Bank continued to use Treasury bills in the primary open market operations for the effective management of liquidity. The Bank also used purchases and sales of foreign currency to control liquidity. There was a G$20.3 billion net redemption of Treasury bills.The Bank of Guyana also continued to facilitate efficient intermediation through the issuance of notes and coins as well as the promotion of enhanced payment system operation.It was noted that the total outstanding stock of Treasury bills fell by 21.5 percent to G$74,146 million, due to the lower issuance of 182-day and 364-day Treasury bills because of the decline in excess liquidity in the banking system. The volume of outstanding 91-day bills, 182-day bills and 364-day bills decreased by 12.5 percent, 37.0 percent and 21.1 percent to G$6,997 million,Discount Air Max 720, G$4,254 million and G$62,895 million respectively.The maturity structure of Treasury bills revealed that the share of 364-day bills represented 84.8 percent of the outstanding stock. The share of the 91-day bill was higher at 9.4 percent while the 182-day bill was lower at 5.7 percent.Of importance is the fact that Commercial banks retained the largest share of the outstanding stock of Treasury bills with 83.5 percent – 1.5 percentage points lower from one year earlier. The public sector’s share, of which the NIS was the only stakeholder, increased to 7.7 percent from 6.9 percent in 2013.The share of other financial intermediaries increased to 6.6 percent from 4.4 percent in 2013. Redemption of Treasury bills increased by 12.4 percent to G$120,834 million. Redemption of the 91-day,Cheap Adidas NHL Jerseys China, 182-day and 364-day bills increased by 81.8 percent, 22.6 percent and 0.5 percent, to G$23,000 million, G$14,107 million and G$79,738 million respectively.Meanwhile, Domestic Debt Service total interest charges fell by 11.7 percent to G$1,545 million. Lower interest payments on treasury bills were due to a decline in the stock as well as lower interest rates resulting from competitive bidding, primarily amongst commercial banks during the review period.Interest costs on Treasury bills redeemed,Clearance Shoes Nz, decreased by 11.5 percent to G$1,467 million and resulted principally from an 18.3 percent or G$279 million decline in interest charges on the volume of 364-day bills redeemed during the year.The outlook for 2015 projected total domestic debt volume, and debt service payments are expected to increase at the end of the year. Debt service payments are also expected to increase by 14.0 percent to G$1,Adidas NMD R1 Italia,742 million at the end of the year stemming from a 16.2 percent increase in interest payments on 364-day Treasury bills issued in 2014.