UAE proposes timetable for first local currency treasury bonds – finance ministry

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DUBAI, April 20 (Reuters)The UAE will soon sell treasury bills denominated in local currency for the first time, seeking to raise 9 billion dirhams ($2.45 billion) with eight auctions between May and the end of the year, the official said. Ministry of Finance on Twitter.

Treasury bills will be issued with variable durations of two, three and five years in an initial phase and a duration of 10 years in the medium term.

The cabinet in January approved a debt strategy aimed at developing a local-currency bond market, joining all other six-nation Gulf Cooperation Council governments that already issue local-currency debt.

A proposed auction schedule on the Department of Finance’s website showed the first sketch for May for two- and three-year-old paper. Auctions would also take place in June, August and October for the same tenors, depending on the schedule.

Two-year notes, as well as five-year bonds, would also be offered in September. The three- and five-year bonds would be sold in December, according to the proposed schedule.

This would bring the total issuance of Treasury bonds this year to 9 billion dirhams.

“The issuance of Treasury bonds in local currency will contribute to the construction of a bond market in local currency, the diversification of financing resources, the revitalization of the local financial and banking sector, as well as the supply of safe investment alternatives to local and foreign investors,” said Mohamed bin Hadi Al. Hussaini, Minister of State for Financial Affairs of the United Arab Emirates, according to a Twitter post from the ministry.

Abu Dhabi Commercial Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, Mashreq and Standard Chartered are the primary dealers for treasury bills.

($1 = 3.6726 UAE dirhams)

(Reporting by Yousef Saba and Lina Najem Editing by Andrew Cawthorne and Mark Potter)

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