Opposition leader Ralph Gonsalves claims that state officials have been quietly soliciting local commercial entities to purchase bond tranches ranging between $250,000 and $500,000, driven by acute cash flow anxieties surrounding public sector payroll.
Speaking during an interview on Star Radio, Gonsalves cited reports from “reliable sources” inside the government administration, alleging that finance officers have resorted to calling private businesses to pitch the short-term debt instruments.
According to Gonsalves, the administration is facing severe cash flow strains stemming from reduced government revenues and sluggish domestic economic activity. He asserted that officials are in “mortal fear” of failing to meet upcoming salary obligations for public servants.
Gonsalves noted that local commercial institutions have resisted purchasing the debt, stating that businesses are avoiding the offerings because the government has “spooked the market”.
To entice reluctant investors, Gonsalves claimed the government is offering exorbitant short-term interest rates between 7.00% and 7.25% on 5-year and 7-year paper. He criticized these yields as unsustainable for short-term sovereign debt, contrasting them with lower commercial borrowing options.
Warning of deeper financial complications ahead, Gonsalves noted that the government remains heavily exposed and is struggling to satisfy existing commitments to financial institutions.
He cautioned that these fiscal hurdles could escalate further as the state approaches additional end-of-year expenses in December.
