A Treasury bill is a short-term discount government security issued by the Ministry of Finance of Georgia. Treasury bills are issued with maturities of up to one year, with a discount, and are redeemed at nominal value.
A Treasury bond is a medium-term coupon security issued by the Ministry of Finance of Georgia. Treasury bonds are issued with maturities between 1 to 10 years, with coupon payments made every six months.
Government securities are issued in the national currency in a dematerialized form. The nominal value of a single security is GEL 1,000. The securities are sold via auctions on dates announced in advance. Anyone can buy government securities via the commercial banks operating in Georgia including individuals or istitutions, resident as well as non-resident.
The total amount of bids submitted to the auction on the banks behalf must not exceed 75% of the issue. The total amount of bids submitted to the auction on behalf of a single client must not exceed 50% of the issue.
In general, government securities feature minimum risk and high liquidity. Government securities serve to develop the financial markets. A developed money market improves the effectiveness of monetary policy and enhances the country’s economic growth potential.
The issue, circulation, registration and redemption of government securities are governed by the appropriate regulations.
Answers to common questions about government securities are available in the list of frequently asked questions.
In March, 2006 the Government of Georgia and the National Bank of Georgia signed an agreement on measures to cover the government debt owed to the National Bank of Georgia. According to the agreement, as of May 17, 2006, part of the Goverment's GEL 832.9 million debt will be re-arranged into bonds (of 16-60 months’ duration) every year. The debt will be fully covered by 2030. These bonds can be used by the National Bank for open market operations.
Treasury bonds are offered to the public through a bond auction. Commercial banks, resident and non-resident individuals and legal persons (through commercial banks) can all participate in the auction. The obligations are issued in the national currency. Then auctions are conducted based on the multi price method.